6. Compute the expected return and risk on your portfolio using the following information: you invest 20%, 40%, and 40% in assets A, B, and C, respectively: Expected returns on assets A, B, and C: 10%, 5%, and 2%, respectively. Standard deviations of A, B, and C are 10%, 6%, and 1%, respectively. The Covariances between the assets are all zero but the covariance between B and C which is 1. 7. Is you have two assets with expected returns 10% and 5%, what is the percentage you have to invest in every assets in order to get an expected return of 8%? What would the risk on that portfolio be if the covariance between the two assets is zero? 8. Explain all the recipe you have to use in order to be able to maximize expected return given a predefined risk. 9. Explain all the recipe you have to use in order to be able to minimize risk given a predefined expected return. 10. Using Excel, take the information from 3 stocks prices of your choice. Take this infor- mation monthly for 10 years. (a) Compute the returns on every stock. In doing do, use the following formula: Pt, i ri= Pt-1,1 1 (1) Where pt,i is the price of stock i at time t. (b) Compute the average return for every stock. (c) Compute the variance and the standard deviation for every stock. (d) Compute the covariance of all the stocks with each other. (e) Set a target expected return for your portfolio based on the averages you com- puted before and find the optimal weights in order to get that expected return by minimizing the risk