Problem 6 You are given the folowing data on 7 stocks: 0.10 2 0.20 0.15 3 0.18 0.20 4 0.12 0.10 5 0.10 0.05 6 0.14 0.10 70.16 0.20 Using these data we ranked the stocks based on the excess return to standard deviation ratio ( r) to compute the entries in the next table. Assume Rf = 5% and that the average correlation coefficient is p 0.50. 1.00 0.5000 2.00 0.6667 3.00 0.7500 3.90 ??? 4.60 0.7668 5.25 0.7502 5.80 0.7250 1.00 0.5000 2 1.00 0.3333 5 1.00 0.2500 6 0.90 0.2000 4 0.70 0.1667 3 0.65 0.1429 70.55 0.1250 a. Find the missing value C4 b. What is the composition of the optimum portfolio assuming no short sales? c. What is the expected return and standard deviation of the combination of the optimum portfolio with the risk free asset (80% and 20%)? Show this combination on the graph of expected return against standard deviation