17. The table below shows the mean returns and standard deviations of returns of four stocks

	Stock A	Stock B	Stock C	Stock D
E(R)	10%	30%	30%	30%
Std. Dev.(R)	5%	25%	25%	25%

The correlations between stock A and the other three stocks are given below:

	Stock B	Stock C	Stock D
Correlation coefficient of Stock A with:	0	1	-1

(20 marks in total)

1. Compare the portfolio mean and standard deviation between three alternative portfolios:

1. Portfolio AB with 70% in stock A and 30% in stock B
2. Portfolio AC with 70% in stock A and 30% in stock C
3. Portfolio AD with 70% in stock A and 30% in stock D

(12 marks)

2. Sketch out the efficiency frontiers for the three combinations of: i) stock A & stock B; ii) stock A & stock C; iii) stock A & stock D. Identify the points i), ii), and iii) on the efficiency frontiers.