I am working on a quantitative finance problem, and I wish to plot the following functions:
and for w between 0 and 1. I have tried the following code:
w=linspace(0,1);mu= 0.1*w+0.14*(1-w);sigma = (0.12^2)*w.^2+0.4*0.12*0.2*2*w(1-w)+(0.2^2)*(1-w).^2;plot(mu,sigma);xlabel('mu'),ylabel('sigma')title('risk vs return')
And I get the following errors:
Incorrect dimensions for raising a matrix to a power. Check that the matrix is square and the power is a scalar. To perform elementwise matrix powers, use '.^'.
But when I replaced the "^" for ".^", I got this error
Array indices must be positive integers or logical values.
And I don't know how to proceed. How could I fix this issue?