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1. You are given the following information:

Use the Variance Covariance matrix in the Excel file: Efficient Portfolios Data.

Construct a model to determine the following:

1. Calculate an envelope portfolio assuming the risk-free rate is 3%.
2. Calculate an envelope portfolio assuming the risk-free rate is 12%.
3. Create a one-way data table that determines the different means and standard deviations for combinations of Envelope Portfolio 1 and Envelope Portfolio 2 by varying the proportion of Portfolio 1 from -5 to +5 in increments of 0.50.
4. Graph the combinations of the portfolios from the one-way data table and add the individual asset means and standard deviations to the graph.
5. Provide a title on the graph and label the axes of the graph.
6. Could the portfolio combinations be on the efficient frontier? Why or why not?

Efficient Portfolios Data Variance - Covariance Matrix A B D E A B 0.0030 0.0003 -0.0001 -0.0004 -0.0007 C 0.0003 0.0350 0.0021 0.0050 0.0023 -0.0001 0.0021 0.0160 0.0023 0.0029 -0.0004 0.0050 0.0023 0.0077 0.0022 Means 1.7000% 1.7300% 4.0100% 1.9600% 0.1200% -0.0007 0.0023 0.0029 0.0022 0.0090 D E Efficient Portfolios Data Variance - Covariance Matrix A B D E A B 0.0030 0.0003 -0.0001 -0.0004 -0.0007 C 0.0003 0.0350 0.0021 0.0050 0.0023 -0.0001 0.0021 0.0160 0.0023 0.0029 -0.0004 0.0050 0.0023 0.0077 0.0022 Means 1.7000% 1.7300% 4.0100% 1.9600% 0.1200% -0.0007 0.0023 0.0029 0.0022 0.0090 D E

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