An investor is evaluating a two-asset portfolio of the following securities: ...
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An investor is evaluating a two-asset portfolio of the following securities:
If the two securities have a correlation of +0.72, what is the expected risk, return and Sharpe ratio for a portfolio that is equally weighted?
If the two securities have a correlation of +0.72, what is the expected risk and return for a portfolio that has the minimum combined risk (Minimum Variance Portfolio).
Tabulate and draw the investment opportunity set of the two risky funds. Use investment proportions for the stocks of 0% to 100% in increments of 10% including the Minimum Variance weights in data set. Find Return, Risk, and Sharpe ratio for every set of data and tabulate using Excel graph function.
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