E(R) Std. Dev (R) Stock A Stock B Stock Stock D 10% 30% 30% 30% 5% 25% 25% 25% The correlations between stock A and the other three stocks are given below: Stock B Stock C Stock D Correlation coefficient of 0 1 -1 Stock A with: (20 marks in total) a) Compare the portfolio mean and standard deviation between three alternative portfolios: i) Portfolio AB with 70% in stock A and 30% in stock B ii) Portfolio AC with 70% in stock A and 30% in stock C iii) Portfolio AD with 70% in stock A and 30% in stock D (12 marks) b) Sketch out the efficiency frontiers for the three combinations of: i) stock A & stock B; ii) stock A & stock C; iii) stock A & stock D. Identify the points i), ii), and iii) on the efficiency frontiers. (8 marks) E(R) Std. Dev (R) Stock A Stock B Stock Stock D 10% 30% 30% 30% 5% 25% 25% 25% The correlations between stock A and the other three stocks are given below: Stock B Stock C Stock D Correlation coefficient of 0 1 -1 Stock A with: (20 marks in total) a) Compare the portfolio mean and standard deviation between three alternative portfolios: i) Portfolio AB with 70% in stock A and 30% in stock B ii) Portfolio AC with 70% in stock A and 30% in stock C iii) Portfolio AD with 70% in stock A and 30% in stock D (12 marks) b) Sketch out the efficiency frontiers for the three combinations of: i) stock A & stock B; ii) stock A & stock C; iii) stock A & stock D. Identify the points i), ii), and iii) on the efficiency frontiers. (8 marks)