Portfolio management. ??

immunise its position. Will it buy or sell the zerc coupon bond and how much is the size of the zero coupon bond? (25% weighting) ITotal 100% weighting) Question 2 You are shown the following Markowitz frontier and Capital Market Line, from a UK perspective, when combining UK stocks with German stocks. UK stocks have an expected return of 4% and a standard deviation of returns of 15%. German stocks have an expected return of 10% and a standard deviation of returns of 22%. The correlation between UK and German equity returns is -0.5. The UK risk-free rate is 2.5%