HW Assignmen t \#2 1)Given the following 4 investment possibilities : { Note :r1,r2, and r3 are related to market conditions, and r4 is related to the weather. This implies that there is NO correlatio n between r4 and the other 3 investment s! \} (a)Find E(r),r,ij,ij, for each investment . (b)Find the expected return and the variance of the portfolios listed below, created by using the weights as given : 2)(a)If short sales are not permitted, find the compositio n weights, expected retur and standard deviation of the minimum risk portfolio for all possible pairwise combinatio ns of portfolios. Ex : (1,2),(1,3), etc... (b)Sketch the efficient frontier and outline the dominant section. 3)If short sales are permitted, show how your answer to (2) changes if borrowing and lending is permitted at 5%. HW Assignmen t \#2 1)Given the following 4 investment possibilities : { Note :r1,r2, and r3 are related to market conditions, and r4 is related to the weather. This implies that there is NO correlatio n between r4 and the other 3 investment s! \} (a)Find E(r),r,ij,ij, for each investment . (b)Find the expected return and the variance of the portfolios listed below, created by using the weights as given : 2)(a)If short sales are not permitted, find the compositio n weights, expected retur and standard deviation of the minimum risk portfolio for all possible pairwise combinatio ns of portfolios. Ex : (1,2),(1,3), etc... (b)Sketch the efficient frontier and outline the dominant section. 3)If short sales are permitted, show how your answer to (2) changes if borrowing and lending is permitted at 5%