You are helping your client to design an investment portfolio. Assuming that the universe of assets consists of three risky

assets, whose return and risk characteristics are in the table below, and a risk$-$free asset that pays $5\%$ return.

Choose $10$ levels of expected returns. For each return level, use Solver to find the portfolio of the three risky assets

that has the lowest portfolio risk.

Plot the efficient frontier using the $10$ portfolios found above.

Find the optimal risky portfolio.

Suppose that your client wishes to achieve an expected return of $10\%$ on the complete portfolio. How should you

allocate her investment money across the assets to achieve this objective?

Suppose that your client is willing to take on a risk level of $6\%$ for the complete portfolio. How should you allocate

her investment money across the assets to achieve this objective?

Risk and return characteristics of three risky assets:

Here are the formula for computing $3-$asset portfolio's expected return and risk:

$E(r_P)=w_{1}E(r_1)+w_{2}E(r_2)+w_{3}E(r_3)$

Var$(r_P)=(w_1{}_1{)}^2+(w_2{}_2{)}^2+(w_3{}_3{)}^2+2w_1{w}_2{}_1{}_2{}_{1,2}+2w_1{w}_3{}_1{}_3{}_{1,3}+2w_2{w}_3{}_2{}_3{}_{2,3}$