Exercise $3$

Which specific combination delivers the least amount of risk $($i$.$e$.$ standard deviation$)?$ Use the formula for the minimum variance portfolio to get the exact weights, calculate its expected return and standard deviation.

Exercise $4$

Which specific combination delivers the highest Sharpe ratio? Assume a monthly risk$-$free rate of $0\mathrm{.}2\%.$ Find the exact weights for the optimal risky portfolio and calculate its expected return and standard deviation. What is the portfolio's Sharpe ratio?

PLEASE LABEL ALL FORMULA SYMBOLS!!!