Author

  • Sree Rama Murthy Y

    • Department of Economics & Finance, College of Economics and Political Science, Sultan Qaboos University, Oman
    • Oman

Abstract

The Excel based financial model proposed in this paper provides a very simple but powerful method for portfolio selection. Apart from a simple and powerful tool for making portfolio management decisions, the paper also proposes an easy to use technique for calculating portfolio standard deviation without using correlation coefficients. The model uses “Excel Solver Add-In” to create an optimum portfolio by maximizing the Sharpe ratio. Benefits of Sharpe style optimization are demonstrated using data on monthly returns from 1999 to 2010 covering 30 stocks.

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References

  • Beninga, S. (2006). Principles of Finance with Excel, 2nd ed. New York: Oxford. Elton, E. J., Martin, J. G., Stephen, J. B. (2003). Modern Portfolio Theory and Investment Analysis, 6th ed. New York: Wiley Reilly, F., K., Keith, C. B. (2006). Investment Analysis and Portfolio Management, 8th ed. Mason: Thomson South Western. Sharpe, F. (1994). The Sharpe Ratio, the Journal of Portfolio Management, 21(1), 49-58.

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How to Cite

Y, S. R. M. (2019). Excel Based Financial Modeling for Making Portfolio Management Decisions. Information Management and Business Review, 11(2(I), 35-41. https://doi.org/10.22610/imbr.v11i2(I).2881

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Copyright (c) 2019 Sree Rama Murthy Y (Author)

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Section

Research Paper

Published in

Vol. 11 No. 2(I) (2019) Smart Farming, Gender Investment & Working Capital View issue contents

Published

2019-07-28

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