Question: 2. Next, consider the estimated global minimum variance portfolio (point labeled Global Min). The estimated portfolio weights if! have estimation error, and the estimated expected

2. Next, consider the estimated global minimum variance portfolio (point labeled Global Min). The estimated portfolio weights if! have estimation error, and the

estimated expected return pm = l' and volatility 6me = (l'i'lwz also

have estimation error. The magnitude of these estimation errors can be quantied

2. Next, consider the estimated global minimum variance portfolio (point labeled Global Min). The estimated portfolio weights if! have estimation error, and the estimated expected return pm = l' and volatility 6me = (l'i'lwz also have estimation error. The magnitude of these estimation errors can be quantied using the bootstrap. The gure below, shows 500 bootstrap estimates of the pair (Ohm: ppm). Using this diagram, briey discuss the estimation error in the pair (6pm, (1am)- Consider again the portfolio risk-return information from part III illustrated below. Efficient Frontier 0.010 0.012 . . vfinx 0.008 Global Ming .... voltx 0.006 Portfolio ER 0.004 0.002 vpacx 0.000 0.00 0.01 0.02 0.03 0.04 Portfolio SD

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