There are two assets: i and j with the following characteristics:

Expected returns: i = 12% and j = 18%.

Risk: i = 30% and j = 40%. ij = 0.5

Consider forming a portfolio of assets i and j. Choose the following weights for your construction of feasible portfolios where no asset shorting is allowed:

1. Using portfolio numbers, only plot the feasible set as a continuous curve.

2. Using portfolio numbers, identify the efficient set on the same graph.

Please show all work and upvotes will be given for correct answer!

Portfolio Proportion of asset i Proportion of asset ; 1 100% 2 75% 50% 25% 5 0% 3 4