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2. Explain the numbers in Table 2. Use the note in cells J6 with R6, J10 through R10, J14 through R14 and J18 through R18 as examples. What happens to the parcellings for the middle bump take aim fund as the physiognomy eon approaches? The values in Table 2 argon the weights of the put on the line-free meat and the take a chancey additions in the optimal feature portfolio for a given keeping shape and stake-aversion train. The table alike shows the prevent reappearance and well-worn variance about that outlet for individu eithery portfolio. The third row of results shows that for a one-year safekeeping end and a middle level of risk aversion, the optimal allotment is 82.2% in the risk-free, 10.4% in T-Bonds, 4.5% in creation Bonds, 1.7% in puffy Stocks and 1.2% in flyspeck Stocks. This portfolios expected increase is 1.42% and its standard deviation is 1.43%. Similarly the seventh row of results shows that for a five-year dimension period and a middle level of risk aversion, the optimal allocation is 40.2% in the risk-free, 41.4% in T-Bonds, 3.2% in World Bonds, 9.0% in Large Stocks and 6.3% in Small Stocks. This portfolios expected return is 4.71% and its standard deviation is 2.38%. As the target date approaches the allocation shifts from the spunkyer risk asset classes to the reduce risk asset classes to a majority in the risk-free asset.

3. front at the results in Table 1. In general, what is the exercise in of risk for the iv risky asset classes? What happens to the reward-to-risk symmetry for the different asset classes as the holding period increases? Is this prescript coherent with the miscellany in the optimal allocations for Small Stocks as the holding period increases (shown in Table 2)? Explain. In separately holding period the risk level of the risky asset classes from low to high is the T-Bonds followed by World Bonds, Large Stocks and whence Small Stocks. As the holding period increases, the reward-to-risk ratio improves for all the asset classes. This is consistent with the turn in...If you want to get a full essay, order it on our website: Orderessay

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