7. (12) Consider the following three assets: Asset 1 Asset 2 Asset 3 Return Return Return 0.16 Probability 0.25 Probability 0.25 Probability 0.25 0.04 0.20 Market Condition Good Average Poor 0.12 0.06 0.14 0.5 0.25 0.5 0.25 0.5 0.25 0.08 0.08 0.08 Assuming short selling is not allowed: a) For Assets 1 & 2 find the composition, standard deviation, and expected return of the portfolio that has minimum risk b) If there is riskless lending and borrowing at 8%, find the location of the optimal portfolio in the case of a)