Which portfolios lie on the efficient frontier

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Reference no: EM131624445

Question: Portfolios A through J, which are listed in the following table along with their returns (rp) and risk (measured by the standard deviation, sp), represent all currently available portfolios in the feasible or attainable set.

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a. Plot the feasible, or attainable, set represented by these data on a graph showing portfolio risk, sp (x-axis), and portfolio return, rp (y-axis).

b. Draw the efficient frontier on the graph in part a.

c. Which portfolios lie on the efficient frontier? Why do these portfolios dominate all others in the feasible set?

d. How would an investor's utility function or risk-indifference curves be used with the efficient frontier to find the optimal portfolio?

Reference no: EM131624445

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