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2. Every investor in the world hates sigma and likes E(R). There are only three risky assets in the world, the stocks GE, IBM and
2. Every investor in the world hates sigma and likes E(R). There are only three risky assets in the world, the stocks GE, IBM and CSCO. You know: Stock Price per share Number of shares outstanding Expected return GE $100 2000 10 IBM $200 9000 5 CSCO $15 18000 13 The risk-free rate is 4%. Find the best, i.e., the lowest-sigma, portfolio of these 4 assets that has an expected return of 10%. If I invest $ 100 in this portfolio, how much will be invested in GE stock? 2. Every investor in the world hates sigma and likes E(R). There are only three risky assets in the world, the stocks GE, IBM and CSCO. You know: Stock Price per share Number of shares outstanding Expected return GE $100 2000 10 IBM $200 9000 5 CSCO $15 18000 13 The risk-free rate is 4%. Find the best, i.e., the lowest-sigma, portfolio of these 4 assets that has an expected return of 10%. If I invest $ 100 in this portfolio, how much will be invested in GE stock
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