Optimal portfolios and the efficient frontier Two asset case Use the corresponding template tab with the same name in the excel file that is part of this assignment to complete the following tasks: a) Calculate the covariance between Security 1 and Security 2 b) Calculate the expected return, standard deviation and Sharpe ratio for each of the provided weight combinations of Security 1 and Security 2. Which of the combinations is most attractive for an investor? Which of the combinations offers the most desirable risk-return trade-off? c) Carefully work through the slides that cover the minimum variance portfolio for two assets (slide 29). What are the weights for Security 1 and Security 2 if you want to hold the minimum variance portfolio consisting of these two assets? What is the resulting return? What is the resulting risk? What is the resulting Sharpe ratio? Do you have to short- sell one of the assets? Are you leveraged? d) Continue with working through the slides about two risky and the risk- free asset (slides 31 33). What are the weights for Security 1 and Security 2 if you want to hold the optimal risky portfolio consisting of these two assets? What is the resulting return? What is the resulting risk? What is the resulting Sharpe ratio? Do you have to short-sell one of the assets? Are you leveraged? e) Based on the previous results, what are the weights of the optimal risky portfolio and the risk-free rate if you want to have an expected return of 12.00%? What standard deviation do you expect? What is the resulting Sharpe ratio? Do you have to short-sell one of the assets? Are you leveraged? f) Finally, visualize your findings in a risk-return diagram. Begin with plotting the portfolio opportunity set. Can you locate the efficient frontier? Add the Capital Allocation Line for the minimum-variance portfolio and the Capital Market Line for the optimal risky portfolio. Where is the optimal complete portfolio? Can you find the new efficient frontier?