Efficient Frontier Assignment

This assignment is to be done in Excel.

You are interested in forming a portfolio with Stock S and Bond B. Stock S has an expected return of
14% and a standard deviation of returns of 30%. Bond B has an expected return of 8% and a standard
deviation of returns of 15%. The correlation coefficient of the returns of S and B is 0.22. The risk-free
rate of return is 5%.

Using increments of 1 percentage point, fill in the template posted and plot both efficient frontiers (with
vs. without the risk-free asset.) When plotting the line for the frontier with the risk-free asset, use a
range from 0 to 30 for the X values.

Please do not forget the important reminders below:

1. The weight in the bond (Wb) for the minimum-variance portfolio needs to be inserted numerically
within the Wb column.

2. The weight in the bond (Wb) for the maximum-Sharpe-Ratio portfolio does not need to be inserted
numerically in the Wb column, but you can do so if you would like.