Plot set of feasible mean variance combinations of return

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Reference no: EM131247110

Let R1 and R2 be the returns from two securities with E(R1) = .03 and E(R2) = .08, VAR(R 1 ) = .02, VAR(R2) = .05, and COV(R1, R2) = -.01

a) Plot the set of feasible mean-variance combinations of return, assuming that the two securities above are the only investment vehicles available.

b) If we want to minimize risk, how much of our portfolio will we invest in security 1?

c) Find the mean and standard deviation of a portfolio that is 50% in security 1.

Reference no: EM131247110

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