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Please be specific, answer all parts step by step, and show the formula you use. Thank you! 3. Consider two assets A and B for
Please be specific, answer all parts step by step, and show the formula you use. Thank you!
3. Consider two assets A and B for which return distributions can be summarized as follows EIR, ]-3% What is the risk of the minimum risk portfolio composed of these two Stocks? (Hint: Use Solver in Excel to minimize p2). Is the risk of the minimum risk portfolio below that of every constituent asset? What is the expected rate of return on the minimum risk portfolio? 4. Consider two other assets A' and B', which are identical (in statistical summary), respectively, to A and B above except that paB-1. a. Draw the graph of the efficient frontier in this case b. Write down the answers to the same questions as in problem 3. 3. Consider two assets A and B for which return distributions can be summarized as follows EIR, ]-3% What is the risk of the minimum risk portfolio composed of these two Stocks? (Hint: Use Solver in Excel to minimize p2). Is the risk of the minimum risk portfolio below that of every constituent asset? What is the expected rate of return on the minimum risk portfolio? 4. Consider two other assets A' and B', which are identical (in statistical summary), respectively, to A and B above except that paB-1. a. Draw the graph of the efficient frontier in this case b. Write down the answers to the same questions as in problem 3
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