Security 1 + Security 4: Short Sales NOT Allowed If we instead assume that short sales are NOT allowed, solve for the minimum variance portfolio. 21. What is the fraction invested in Security 1? (2 decimal places if required) 22. What is the fraction invested in Security 4? (2 decimal places if required) 23. What is the expected return for this portfolio? (in %, 2 decimal places if required) 24. What is the standard deviation for this portfolio? (in %, 2 decimal places if required) Note: For each of the pairs above, you should practice plotting the combinations of securities on the R- space and marking the location of the minimum variance portfolio. Also ask yourself what would happen in each case with short-sales allowed if there was a risk-free asset with RF= 5%.

This only covers material from chapter 5. Use the following information for questions 1 24: Security R(%) 1 12 2 6 3 14 4 12 In addition, the correlations are: P12 = - -1, P13 = 1, P14 = 0. 0 (%%) 8 2 18 10.7 This only covers material from chapter 5. Use the following information for questions 1 24: Security R(%) 1 12 2 6 3 14 4 12 In addition, the correlations are: P12 = - -1, P13 = 1, P14 = 0. 0 (%%) 8 2 18 10.7