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

                           

r_AB= 0

What 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?

Answer rating: 100% (QA)

To find the minimum risk portfolio composed of assets A and B we first need to calculate the portfol... View the full answer