1. Given the expected returns, standard deviations, and the covariance or correlation coefficient of two assets, how do you calculate the expected return and standard deviation of a specific portfolio of these two assets?
2. How to calculate the diversification effect of a portfolio of two assets?
3. What do all points that cluster in an umbrella shape in the R_{P p} plane represent. What is the above-mentioned cluster called?
4. What is the North-West direction on the above-mentioned plane desirable?
5. How does Markowitz eliminate the no-good portfolios from that cluster?
6. What does he end up with after hes done eliminating those no-good portfolios? What do we call the remaining ones?
7. What are the indifference curves of an investor? Indifference to what? How do we use these indifference curves?