Use the following information to answer questions 20-24.

You would like to form a portfolio. You have the following information:

• ARABTEC stock has an average return of 8% and a standard deviation of 15%.
• DEYAAR stock has an average return of 13% and a standard deviation of 20%.
• The correlation between ARABTEC and DEYAAR is 30%.
• The risk free rate is equal to 3%.

Question 20:

If you invest 30% in ARABTEC and the remaining part in DEYAAR, what will be your portfolio return?

Question 21:

If you invest 60% in ARABTEC and the remaining part in DEYAAR, what will be your portfolio standard deviation?

Question 22:

What is the minimum variance portfolio weight in ARABTEC?

Question 23:

What is the optimal risky portfolio weight in Arabtec?

Question 24:

What is the return of the optimal risky portfolio?