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An Investment Adviser is helping a couple plan a retirement portfolio. The adviser has recommended three stocks: Allied Electronics, Bank United, and Consolidated Computers. Following

An Investment Adviser is helping a couple plan a retirement portfolio. The adviser has recommended three stocks: Allied Electronics, Bank United, and Consolidated Computers. Following are annual return and variance for each stock and the covariance between stocks:

Stock Combination (i,j) Covariance
A,B .4
A,C .7
B,C .3

Stock Annual Return Covariance
Allied Electronics .14 .10
Bank United .10 .04
Consolidated Computers .12 .08

The couple wants a total portfolio return of at least .11. Determine the proportion of each stock to include in the portfolio to minimize the overall risk.

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