1. Home
  2. /
  3. Uncategorized
  4. /
  5. Pat McCormack variance of...

Pat McCormack variance of portfolio

Pat McCormack, a financial advisor for Investors R Us, is evaluating two stocks in a particular industry. He wants to minimize the variance of a portfolio consisting of these two stocks, but he wants to have an expected return of at least 9%. After obtaining historical data on the variance and returns, he develops the following nonlinear program:

Minimize portfolio variance = 0.16X2 + 0.2XY + 0.09Y2

subject to X + Y = 1 (all funds must be invested)

0.11X + 0.08Y >=0.09 (return on the investment)



X = proportion of money invested in stock 1

Y = proportion of money invested in stock 2

Solve this using Excel and determine how much to invest in each of the two stocks. What is the return for this portfolio? What is the variance of this portfolio?

Our Essay Format
  • Times New Roman, 12 pt
  • 1 Inch Margins
  • Double/ Single Spacing
  • 275/ 550 Words Per Page
  • MLA/ APA/ Turabian/ Chicago style, etc

A standard double-spaced page contains 275 words

Free Features
  • Hiring a preferred expert
  • Bibliography & cover page
  • Revisions within 14-30 days
  • 24/7 customer support

Place Your Order Now!

No matter what type of essay you need, we’ll get it written, so let’s get started.

Order Now