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Hints: The following formula are needed for your calculation. E(rP)=wBE(rB)+wSE(rS)P2=(wBB)2+(wSS)2+2(wBB)(wSS)BS B. Based on your calculations, draw a graph (click insert) for the efficient frontier of
Hints: The following formula are needed for your calculation. E(rP)=wBE(rB)+wSE(rS)P2=(wBB)2+(wSS)2+2(wBB)(wSS)BS B. Based on your calculations, draw a graph (click "insert") for the efficient frontier of the investment opportunity set. Hint: X-axis is the standard deviation and Y-axis is the expectation return. Below are expected returns and standard deviations of the stock and bond portfolios as well as their correlation E(rs)10s18E(rb)5b9bs0.2
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