Abstract
The complete Markowitz Model and the Index Model have a wide range of applications for portfolios in the stockmarket, and in this paper, we want to apply these two models in a realistic stock market. In this paper, ten stocksbelonging to different industries and the S&P 500 equity index are selected as a portfolio, and the 1-month Fed Fundsrate is chosen as the risk-free rate. Through proper data aggregation and processing, we calculate the weights ofeach stock in the portfolio in the case of minimal portfolio variance and maximal Sharpe ratio under five additionalconstraints using the complete Markowitz Model and the Index Model, respectively. Finally, we can calculate theminimal variance frontier, efficient frontier, inefficient frontier, and capital allocation line under each constraint, plottedusing the Solver Table in Excel
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