Question: Consider two assets A and B for which return distributions can be summarized as follows 1What is the risk of the minimum risk portfolio composed

Consider two assets A and B for which return distributions can be summarized as follows

Consider two assets A and B for which return distributions can be

1What is the risk of the minimum risk portfolio composed of these two Stocks? (Hint: Use the calculus to minimize s_p²). Is the risk of the minimum risk portfolio below that of every constituent asset? What is the expected ROR on the minimum risk portfolio?

2Consider two other assets A and B, which are identical (in statistical summary), respectively, to A and B above except that r_AB = 1. Write down the answers to the same question as in 1.

EIR, ] = 3% EIR,1-7% 0 Og = 2%

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