For simplicity and convenience of calculation, suppose there are only one risk-free asset with a return of 2% and two risky assets, Stock A and Stock B. Information on A and B are summarised in the table below. Stock A Expected return (%) 12 Standard deviation 15 (%) Correlation Stock B 7 10 Correlation coefficient = 0.10 (a) Explain the concept of the minimum-variance portfolio (without the risk-free asset). Use the above information to calculate the investment weightings, expected return, and risk of the minimum-variance portfolio of this 2-stock portfolio. Illustrate your answer in a diagram. (10 marks) (b) Assume your mean-preference utility function is U (E(rp), op) = E(r) -, explain the concept of the optimal portfolio, calculate the investment weightings, expected return and risk as well as the corresponding utility level of the optimal portfolio. Illustrate in a diagram (could use the same diagram from a). (10 marks) (c) What is the expected return and standard deviation for the tangent portfolio? Illustrate in a diagram (could use the same diagram from a).