Question: Each curve ( Tall = Green, Medium = Blue, Flat = Red ) represents a stock portfolio with a mean return of 1 0 %

Each curve (Tall = Green, Medium = Blue, Flat = Red) represents a stock portfolio with a mean return of 10%. Which curve is the most desirable from a risk management perspective? Why is this? If we combine the portfolios represented by the Tall and Flat curves, what should we expect to happen to (a) average return, and (b) total risk as measured by variance? What assumptions are you making?

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