1. Which specific combination would deliver the least amount of risk? Use the formula for the minimum variance portfolio to get the exact weights, calculate its return and standard deviation, and mark it by hand on your plot printout.

2. Draw in the CAL (by hand) that gives you the best risk-return combinations, given that the monthly risk free rate is 0.15%. Mark the optimal risky portfolio. Calculate the optimal risky portfolio's weights in the two stocks (using the book's formula 6.10). For this optimal portfolio, calculate the average return, standard deviation, and Sharpe ratio.

3. Mark the spot on your return / standard deviation plot where the market index (i.e. S&P 500) falls.

4. For a moment, assume the correlation between the two stocks equals exactly 1. Graph the investment opportunity set. (Hint: This does not require any additional excel work or calculations)

5. Now assume the correlation between the two stocks equals exactly -1. Again, graph the investment opportunity set. Make sure to be precise, and provide your calculations. If you would like, you can perform steps 4 and 5 on the same graph.