Add a new stock, stock 4, to the portfolio optimization model Assume that the estimated mean and standard deviation of return for stock 4 are 0 125 and 0 175, respectively Also, assume the correlations between stock 4 and the original three stocks are 0 3, 0 5, and 0 8 Run Solver on the modified model, where the required expected portfolio return is again 0 12 Is stock 4 in the optimal portfolio Then run SolverTable as in the example Is stock 4 in any of the optimal portfolios on the efficient frontier

Question: Add a new stock, stock 4, to the portfolio optimization model. Assume that the estimated mean and standard deviation of return for stock 4 are

Add a new stock, stock 4, to the optimization model. Assume that the estimated mean and standard deviation of return for stock 4 are 0.125 and 0.175, respectively. Also, assume the correlations between stock 4 and the original three are 0.3, 0.5, and 0.8. Run Solver on the modified model, where the required expected return is again 0.12. Is stock 4 in the optimal Then run SolverTable as in the example. Is stock 4 in any of the optimal portfolios on the efficient frontier?

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