Question: For this question, use the following data table: AT&T Microsoft Expected Return 0.10 0.21 Standard Deviation 0.15 0.25 What is the minimum-risk (standard deviation) portfolio

  1. For this question, use the following data table:

  		2.

    AT&T

    Microsoft

    Expected Return

    0.10

    0.21

    Standard Deviation

    0.15

    0.25

    What is the minimum-risk (standard deviation) portfolio allocation of AT&T and Microsoft if the correlation between the two stocks is 0? 0.5? 1? -1? What is the standard deviation of each of these minimum-risk portfolios? (4 pts)

  3. What is the optimal combination of these two securities in a portfolio for each of the four given values of the correlation coefficient, assuming the existence of a money market fund that currently pays a risk-free 0.045? (2 pts)

Only need the last question answered -

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