plot_risk_adjusted_returns: Plotting risk adjusted returns

In R4GoodPersonalFinances: Make Better Financial Decisions

Plotting risk adjusted returns

Description

Plots the risk adjusted returns for portfolios of various allocations to the risky asset.

Usage

plot_risk_adjusted_returns(
  safe_asset_return,
  risky_asset_return_mean,
  risky_asset_return_sd,
  risk_aversion = 2,
  current_risky_asset_allocation = NULL
)

Arguments

safe_asset_return	A numeric. The expected yearly return of the safe asset.
risky_asset_return_mean	A numeric. The expected (average) yearly return of the risky asset.
risky_asset_return_sd	A numeric. The standard deviation of the yearly returns of the risky asset.
risk_aversion	A numeric. The risk aversion coefficient.
current_risky_asset_allocation	A numeric. The current allocation to the risky asset. For comparison with the optimal allocation.

Value

A ggplot2::ggplot() object.

See Also

• How to Determine Our Optimal Asset Allocation?

• Haghani V., White J. (2023) "The Missing Billionaires: A Guide to Better Financial Decisions." ISBN:978-1-119-74791-8.

Examples

plot_risk_adjusted_returns(
  safe_asset_return              = 0.02,
  risky_asset_return_mean        = 0.04,
  risky_asset_return_sd          = 0.15,
  risk_aversion                  = 2,
  current_risky_asset_allocation = 0.8
)

R4GoodPersonalFinances documentation built on April 4, 2025, 1:48 a.m.