Andrea Corbridge is considering forming a portfolio consisting of Kalama Corp. and Adelphia Technologies. The two corporations have a correlation of -0.1789, and their expected returns and standard deviations are as follows:

	Kalama Corp.	Adelphia Technologies
Expected return (%)	14.86	23.11
Standard Deviation (%)	23.36	31.89

Calculate the frontier for all possible investment combinations of Kalama Corp. and Adelphia Technologies (from 0% to 100%, in 1% increments). Determine the optimal risky portfolio if the risk-free rate is 3%.

Answer rating: 100% (QA)

Solution From correlation standard deviation we can compute the fo... View the full answer