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Construct an investment portfolio. Suppose that you have several risky (at least two) assets in your hand. 1. In your work, you should first, present
Construct an investment portfolio. Suppose that you have several risky (at least two) assets in your hand. 1. In your work, you should first, present clearly your assumptions and notations adopted. 2. Assign values for the parameters of your risky assets, i.e., their expected rate of return , volatility, and the correlation factor. 3. Construct a minimum-variance portfolio for your risky assets. 4. Now, add one more asset (riskless asset) to your portfolio, .i.e., a bank deposit with the same investment time horizon. Find the formula for the highest trade-off line you can get. Also write down the composition of the optimal combination of risky assets for this case. 5. Set your dreaming expected rate of return for your portfolio by yourself. Find the composition
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