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Numerical Part In the following, assume that the parameters are given by d U2 ui 0.10 d2 -0.20 0.6 -0.12 0.15 2 3. Based on the numbers from the above table , report both the global minimum variance (GMV) and the Sharpe portfolios denoted by wgmy and wsr, respectively, when 5 (a) p=0.5 (b) p=0.6 (c) p=0.0 4. Given on the above results, how do you justify the changes in the portfolio weights relative to changes in the correlation coefficient? Recall the wisdom of diversification. 5. For the last task, let p= 0.5 and address the following (a) Construct and plot the mean-variance efficient frontier (recall the two-fund separation theorem). (b) Note that we have two stocks (N = 2). Any combination of wi and W2 = 1 wi results in mean-variance efficient portfolios. To illustrate, consider arbitrary numbers for wi and compare the results with the previous frontier. Numerical Part In the following, assume that the parameters are given by d U2 ui 0.10 d2 -0.20 0.6 -0.12 0.15 2 3. Based on the numbers from the above table , report both the global minimum variance (GMV) and the Sharpe portfolios denoted by wgmy and wsr, respectively, when 5 (a) p=0.5 (b) p=0.6 (c) p=0.0 4. Given on the above results, how do you justify the changes in the portfolio weights relative to changes in the correlation coefficient? Recall the wisdom of diversification. 5. For the last task, let p= 0.5 and address the following (a) Construct and plot the mean-variance efficient frontier (recall the two-fund separation theorem). (b) Note that we have two stocks (N = 2). Any combination of wi and W2 = 1 wi results in mean-variance efficient portfolios. To illustrate, consider arbitrary numbers for wi and compare the results with the previous frontier

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