Portfolio variance minimization process

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Reference no: EM131940077

In order to find the Minimum Variance Portfolio (MVP), which constraints do you include in the Markowitz’s portfolio variance minimization process? Assume no short sale is allowed.

I) Expected Return = a specified return

II) The weight on each stock must be greater than or equal to zero

III) The sum of all weights must add to 100%

a. I only b. II and III only c. I and III d. I, II, and III

4. Firm ZXY has $20 mil in Debt, $30 mil in Book Value, $90 mil in Total Asset and a market value of $65 mil. The earning for the year is $8 mil. Its return on capital is

a. 16.0% b. 9.4% c. 8.89% d. 5.71%

Reference no: EM131940077

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