TAKE X= 3

URGENT !!!!

3. An investor has the following assets available for investment. [25] ] Stock A B return 0.10 0.16 St. devcov (A,B) 0.18 -0.029 0.36 a. How can an investor earn a target rate of return of 12.x percent using the two stocks above? (3] b. What will be the risk of his portfolio? [3] c. What is the maximum return the investor can make if his maximum risk tolerance is 17.5 + x percent? Find the weight of each stock in the portfolio and the maximum attainable return. [7] d. Suppose that covariance between the two stocks changes to Cov(A,B) = -0.01x, find the minimum variance portfolio and the return of this portfolio. [12] =