1) You are trying to attract a new client who wants a portfolio that is expected...

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1) You are trying to attract a new client who wants a portfolio that is expected to yield a return that is greater than the P & S, and has a standard deviation that is equal to the P & S. What return do you think you can generate? What is the composition of this portfolio? Plot the frontier of all portfolio possibilities. Where would the P & S fall on this plot? Hint: Solving this may take some trial and error, or high school math. The sector analysts forecast the following expected annual returns. Technology 12.0% Consumer goods 7.5% Services 10% Financial 11% Sin 8.5% Using historical returns, you generate the following variance-covariance matrix. Technology Consumer goods Services Financial Sin Technology Consumer goods 0.0045 0.0025 0.0040 Services 0.0013 0.0010 0.0023 Financial 0.0017 0.0008 0.0016 0.0034 Sin -0.0010 -0.0020 0.0000 0.0005 0.0029 All numerical answers should be carried out to 2 decimal places. 1) You are trying to attract a new client who wants a portfolio that is expected to yield a return that is greater than the P & S, and has a standard deviation that is equal to the P & S. What return do you think you can generate? What is the composition of this portfolio? Plot the frontier of all portfolio possibilities. Where would the P & S fall on this plot? Hint: Solving this may take some trial and error, or high school math. The sector analysts forecast the following expected annual returns. Technology 12.0% Consumer goods 7.5% Services 10% Financial 11% Sin 8.5% Using historical returns, you generate the following variance-covariance matrix. Technology Consumer goods Services Financial Sin Technology Consumer goods 0.0045 0.0025 0.0040 Services 0.0013 0.0010 0.0023 Financial 0.0017 0.0008 0.0016 0.0034 Sin -0.0010 -0.0020 0.0000 0.0005 0.0029 All numerical answers should be carried out to 2 decimal places.