*1. Explain the difference between a minimum variance portfolio and an optimum portfolio. (2 points)

2. You have been given the following information about two-assets portfolio.

Assets	Proportion of investment	Return	Standard deviation	Variance
Tri-Star	30%	8%	12%	1.44%
Double-Star	70%	12%	15%	2.25%

Risk free rate of return is 4%. The covariance of the two assets return is negative 0.1100.

a. Using the above information, you are required to calculate

i. Portfolio which maximise the Sharpe ratio and return. (3 points)

ii. If a portfolio manager aiming to get at least 9% return on combining the two-assets portfolio with the risk free assets, estimate the risky assets percentages and the risk free asset percentage in the combine portfolio (hint, you need to estimate the return of the portfolio which maximise the Sharpe ratio in the section ii). (3 points)

• minimum variant portfolio W2=1-W1	Portfolio which maximise the Sharpe ratio W2=1-W1 (R=Average-Risk free rate)
  Risky assets percentage in the combine portfolio. R	Stranded deviation of two assets portfolio