1 A portfolio has two stocks: K and XOM. 2 3 4 Average, E(r) and E(TxOM) 5 Variance, Var(rk) and Var(TXOM) 6 Sigma, ok and OXOM 7 Covariance of returns, Cov(TK.TXOM) 8 9 Q3 1 Portfolio return and risk 10 11 12 13 14 EFFICIENT FRONTIER 18 19 20 21 22 23 Percentage in K Percentage in XOM Expected portfolio return, E(rp) Portfolio variance, Var(r) Portfolio standard deviation, op 0% 10% 20% 30% K 8.31% 0.0139 11.80% 0.0064 XOM 13.11% 0.0281 16.77% 15 16 17 Q3.2 must use DATA TABLE to finish the computation Percentage in K D

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