Now that you have organized your worksheet and added the data used in your analysis, you can define the summary formulas that will calculate the output of a given portfolio’s overall beta and expected return.
- [Instructor] Now that you have organized your worksheet,…and added the data used in the analysis,…you can define the summary formulas…that will calculate the output of a given portfolio's…overall beta and expected return.…In this movie I will use the investments_03 workbook.…You can find that sample file in the chapter two folder…of the exercise files collection.…For a quick review of what we've done,…I have a set of eight funds labeled very creatively…Fund1 through Fund8.…
Each of them has a beta.…Which is the amount that each particular fund moves…relative to the market.…For Fund1 with a beta of 1.66,…if the market went up by 10 points,…Fund1 would go up by 16.6.…The bad news of course is that if the market went down…by 10 points…then that same fund would go down by 16.6 points.…The average return over the years has been 6.62%.…
We see similar data for funds two through eight.…The target beta,…which will be the blended average of the investments…that we split between these eight funds is 1.3.…That's in cell C12.…
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- Finding target values using Goal Seek
- Finding a solution using Solver
- Tuning investment portfolios
- Organizing worksheets
- Creating objective and control formulas
- Experimenting with different constraints
- Optimizing resource placement
- Defining decision trees