1) What is the expected return of each security?

2) What is the standard deviation of each security?

3) What are the covariances between the pairs of securities?

4) What are the correlations between the pairs of securities

5) What is the expected return of a portfolio with half of its funds invested in Security 1 and half of Security 2?

6) What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half of Security 2?

7) What is the expected return of a portfolio with half of its funds invested in Security 1 and half of Security 3?

8) What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half of Security 3?

9) What is the expected return of a portfolio with half of its funds invested in Security 2 and half of Security 3?

10) What is the standard deviation of a portfolio with half of its funds invested in Security 2 and half of Security 3?

There are three securities in the market. The following chart shows their possible payoffs: State 1 2 3 4 Probability Return on Return on Return on of Outcome Security 1 Security 2 Security 3 .15 .20 .20 .05 .35 .15 .10 .10 .35 .10 .15 .15 .15 .05 .05 .20