Question 3 U.S. stocks have an expected return of 10% and a standard deviation of 20%. Foreign stocks have an expected return of 15% and a standard deviation of 30%. The correlation between the two markets is 25%. The risk-free borrowing and lending interest rate in the U.S. is 5%. a) Plot the efficient frontier for combinations of the two portfolios (US and foreign stocks). b) Which portfolio combination of the US and foreign stock portfolios has the minimum variance? c) Which portfolio combination of the US and foreign stock portfolios should an investor hold who can access the borrowing and lending markets? Does this portfolio depend on the risk aversion of the investors?