FRM : How to Build Efficient Frontier in Excel - Part 1 (of 2)
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- Опубліковано 7 лют 2025
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We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
This Video lecture was recorded by our Lead Trainer for CFA, Mr. Utkarsh Jain, during one of his live CFA Level I Classes in Pune (India).
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![CFA/FRM : How to Build Efficient Frontier in Excel- CAL and Use of Sharpe Ratio [Part 2 of 2]](http://i.ytimg.com/vi/CP3pH3Pjz1A/mqdefault.jpg)
![CFA/FRM : How to Build Efficient Frontier in Excel- CAL and Use of Sharpe Ratio [Part 2 of 2]](/img/tr.png)
yoo, thanks for the video. your explanation helped me on the efficient frontier graph for my assignment.
Utkarsh Jain Sir.. Thank u so much for providing video session on building of Efficient frontier..
Video is really good and commendable sir🎉🎉
Amazing explained 🙏
Thanks for very useful tutorial!!
I loved this video. Amazing.
when i enter the standard dev formula, it is showing error or mistake in formula. what is the possible reason ?
Thank you ! So helpful
While the graph output does represent an efficient frontier, I am skeptical to call it an efficient frontier because those returns were not derived by way of optimizing the weights to maximize the returns per level or variance or minimize variance given the returns. Many of those portfolios are likely to fall off the efficient frontier when the weights are optimized
Can you please make video with solver of building optimal portfolio of about 8-10 stocks and a risk free asset ( t-bill) ?
Thank you. Very well explained
Sir u r amazing . I am ur big Fan, i watch every video . Thank you sooo much
chamach
Is the part 2 uploaded on youtube?
Thank you sir for the sharing, really enjoy the way you explain it. If i may ask u sir, I am wondering how if we face the mean/average of our portofolio is negative, do we still can applied this methodology? If it just cannot, then what is the best methodology that u will recommend? If it can, do we should assume that the mean is the absolute (positive) value?
but here only got 2 assets. how about the efficient frontier of one portfolio which contains 10-15 assets?
Thanks for explaning this so nicely. Would be great if you could please shine some light on Lily's above question.. Thanks!!
@@morphosin fuckkk youuu
@@masahikokimura5817 JEEZ
This is much more complicated and in fact I am taking on the challenge right now. I will warn you if you wish to do it as well lily you must have computer programing skills because this is not feasible manually on excel. If we were to increment by one percent for each stock we end up with billions of portfolios. If anyone wants the details after I finish I can give a general overview of what I did.
@@leelandzhang_tianyu Not true - it's possible to use the variance/covariance method and some matrix multiplication in excel to solve for 2+ stock portfolios
How to calculate Standard deviation of portfolio when 3 stocks were taken
Wow. very helpful
Hi sir why did you use 0.5 in power while calculating SD
Y^x function
gday sir,
Thank you for the amazing videos.
It was very clear and easy to understand. However i was not very sure about how you switched the data using one of the stock(time at 14:23 )
could you please explain?
thank you.
Thanks , it seems our editing guys conveniently edited out a few seconds there! What I simply did waste change a few numbers of second stock to reduce correlations. No maths , just trial and error ! Cheers
@@FintreeIndia I see!! That make sense
Thank you so much for kindly teaching me! This video really helps.
Hello Mr, Thanks in advance for the great content you post, I have a question, to enjoy the diversification benefits under Markowitz theory, would´t be necessary to have negatively correlated stock ?
yeah, you should have negative correlation to really diversify and minimize your risk
Why do you calculate Rp from the columns F and J differently?
why don't you use geometric mean in calculating average return of stocks?
hi sir, how do we get the equation of the frontier? is there a function on excel that can do that?
The frontier is a hyperbola. You can use Excel solver add-in, or a curve fitting algorithm to estimate the parameters of the hyperbola.
Thanks Sir
The number 2 in the S.D. formula is because you got 2 assets?
MrCentrax no, it’s a part of the formula , think of (a+b)^2
@@FintreeIndia Thanks, your videos are really good and easy, finally understood It but assigning a weight with more than 2 assets in that way is quite complicated.
MrCentrax it can be as formula for sigma expands , in case of more number of assets , you may use a little matrix algebra , MMULT function in excel can do the magic.
Utkarsh
Sir, Surely It will help me out in my Research Project....
Sir if we have 3 assets how we build efficient frontier??
why didnt you take the corraltion into account? Could you please make a video with 3 assets? why there are graphs, where they paint portfoils under the efficient frontier. Normally all of the porfoils are on the correlation line and there are not any underneath
Maria Mitova the “true” process required you to optimize portfolios which will produce lowest variance for given return. Process used in this videos uses an approximation to help us make sense of the process
Thank you for your answer. I just can not understand why there are graphs, where you can see porfils bellow the efficient frontier? As you see, your portfoils are all on the correlation line(efficient frontier) and i have plotted a graph with 3 assets and they all were on the line, so how is it possible to have any under the line?
Hi sir can unit trust build Efficient Frontier?
Sir I have doubt...pls reply with answer..
I tried solving this as per the instructions I use solver function and it is coming up with huge values.. like 172% and -32% kind off.. so what does it mean?
make constraints that allocation sum of all assets =100%
sir, can I get the part 2 of this clip..?
Sure, Part II will be available on tomorrow morning 11am [IST]
Part II Available Now. ua-cam.com/video/CP3pH3Pjz1A/v-deo.html
Why did you raise it to .5?
under root
كيفت تعليم الجهاز العمل
sir if there is too much points in the graph (nearly 300 portfolios) , in that case how can i find top 5 optimal portfolios from these 300 portfolios? its almost impossible to find it manually. Is there any technique to find out?? if yes, what is the process , plz let me know. thnx
please google
you should use subtitles in your videos, the accent is to thick
Hi Alvaro,
Thanks for getting in touch with us!
We appreciate you watching our video content and providing feedback. We will definitely look into your feedback for further consideration.
Best regards,
Team FinTree