a. What is the portfolio return and portfolio risk? (SD)

b. What is each asset's risk? (SD)

c. Compare portfolio SD and the weighted average of three assets' SD

Example: Three-Asset Portfolio Suppose a portfolio has three equal-weighted assets: IBM, Merck, and Intel. Their returns are 3%, -6%, and 4% respectively. Their covariance matrix is as follows: IBM Merck Intel IBM 0.007770 0.002095 0.001189 Merck 0.002095 0.003587 0.000229 Intel 0.001189 0.000229 0.009790 What is the portfolio return and portfolio risk (SD)? What is each asset's risk (SD)? Compare portfolio SD and the weighted average of three assets' SD