Question: A: E[r] = 0.1 Var = 0.01 B: E[r] = 0.15 Var = 0.0144 C: E[r] = 0.07 Var = 0.0169 Correlation between A and

A: E[r] = 0.1 Var = 0.01

B: E[r] = 0.15 Var = 0.0144

C: E[r] = 0.07 Var = 0.0169

Correlation between A and B = 0.5

Correlation between A and C = 0.4

Correlation between C and C = -0.3

portfolio allocates 0.5 to A, 0.3 to B, and 0.2 to C

Rank A, B and C in increasing order based on their contribution to the overall portfolio variance. With calculations

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