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a) Given a simple world with two assets, a bond fund and a stock fund, clearly detail the steps involved in arriving at the 1)

a) Given a simple world with two assets, a bond fund and a stock fund, clearly detail the steps involved in arriving at the 1) efficient frontier, and 2) market (optimal) portfolio.

b) One important assumption behind portfolio theory is that investors are"mean- variance maximizers."What is the meaning of this? Explain why this assumption is important in the delineation of the efficient frontier.

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