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Compute, AB , the correlation between frontier portfolios A and B. Calculate the expected return on the global minimum variance portfolio. Calculate the maximum possible
- Compute, AB, the correlation between frontier portfolios A and B.
- Calculate the expected return on the global minimum variance portfolio.
- Calculate the maximum possible Sharpe Ratio from these frontier portfolios, when the risk free rate is 2% per annum.
- Explain, illustrating with graphs, the difference between the portfolio frontier when there is a risk free asset available for investment as compared to the portfolio frontier when there is not.
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