Intro

Instructions: this is a Part 2 question (DO NOT answer here; instead go to Blackboard)

You found the expected returns and variance-covariance matrix of returns for 3 stocks:

	Amazon	Walmart	Exxon
E(r)	36%	16%	5%

	Amazon	Walmart	Exxon
Amazon	0.35
Walmart	0.08	0.17
Exxon	0.04	0.02	0.08

Attempt 1/3 for 10 pts.

Part 1

1) Find portfolio weights, portfolio standard deviation when E(r_p)=25% on the Efficient Frontier.

2) Find portfolio weights, portfolio expected return when portfolio standard deviation=35% on the Efficient Frontier.

3) Find portfolio weights, portfolio standard deviation and portfolio expected return for the minimum variance portfolio.

4) Find portfolio weights, portfolio standard deviation and portfolio expected return for the optimal risky portfolio. Assume risk-free rate is 0.5%.

(disregard the solutions provided after due)