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An investment company intends to invest a given amount of money in three stocks. The means and standard deviations of annual returns are as follows:

An investment company intends to invest a given amount of money in three stocks.

The means and standard deviations of annual returns are as follows:

Stock Mean Standard Deviation
1 0.14 0.20
2 0.11 0.25
3 0.15 0.08

Stock Coorelation among annual returns
Stocks 1 and 2 0.5
Stocks 1 and 3 0.8
Stocks 2 and 3 0.1

Construct the efficient frontier for portfolios of these stocks. Please explain the involved steps in your modeling and construction.

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