Excess Return Variance Return 15.00% 7.30% Stock Bond Std.Dev 22.20% 12.0% Covariance Correlation Risk Free Rate 0.3 5.00% Covariance Part A Weight Min Var Portfolio Stock Bond Min Var Portfolio Ret Std.dev Part B Weight Optimal Portfolio Stock Bond Optimal Portfolio Ret Std.dev Part C Weight Mkt Weight Min Var 70% Correlation 30% A 1 3 Return Std.dev Part D Optimal Allocation