"Need help with A$-$D for question $2"$ The probability distributions of rates of return for three stocks, C$,$ D$,$ & E$,$ are shown below:

$(0\mathrm{.}25$ point$)$

Rate of cetum. $(\%)$

Probability

$0\mathrm{.}1$

$0\mathrm{.}2$

$0\mathrm{.}4$

$0\mathrm{.}2$

$0\mathrm{.}1$

$\backslash$table$[[$Stock C$,$Stock D$,$Stock$],[0,25,10],[5,15,10],[10,15,20],[15,5,15],[20,5,5]]$

Use the above information to answer the following questions:

a$.$ Suppose you construct the following portfolios with stocks C & D$.$ Calculate the expected rate of return and the risk $($standard deviation$)$ of each portfolio.

$(3\mathrm{.}5$ points$)$

$\backslash$table$[[$Portfolio$,W_c,W_D,$Expected rate of return $,$ Risk $($standard deviation$)],[1^{**},0\mathrm{.}0,1\mathrm{.}0,],[2,0\mathrm{.}1,0\mathrm{.}9,],[3,0\mathrm{.}2,0\mathrm{.}8,],[4,0\mathrm{.}4,0\mathrm{.}6,],[5,0\mathrm{.}5,0\mathrm{.}5,],[6,0\mathrm{.}6,0\mathrm{.}4,],[7****,0\mathrm{.}7,0\mathrm{.}3,],[8,0\mathrm{.}8,0\mathrm{.}2,],[10,0\mathrm{.}9,0\mathrm{.}1,],[1\mathrm{.}0,0\mathrm{.}0,,]]$

$,*0\%$ of your money is invested in stock C and $100\%$ is invested in Stock D$.$

$**70\%$ of your money is invested in stock C and $30\%$ is invested in Stock D $.$

b$.$ Plot each portfolio in the risk$-$return space $($X$-$axis: risk $[$standard deviation of portfolio$],$ Y$-$axis: expected rate of return$).$ Check panel C$,$ p $119$ of your textbook. Join the points to draw the graph. Note: you can use EXCEL to draw the graph.

$(1$ point$)$

c$.$ If you construct the minimum$-$risk portfolio $($minimum$-$variance portfolio$)$ with stocks C and D $,$ what will be the expected rate of return and the risk $($standard deviation$)$ of the minimum$-$risk portfolio? Indicate the minimum$-$risk portfolio in the graph.

d$.$ Indicate your optimal portfolio. What is the expected return and the risk $($standard deviation$)$ of your optimal portfolio? What percent of your portfolio must be invested in stock C to construct your optimal portfolio? Assume you are a risk$-$averse investor, exhibit increasing risk aversion, and use mean$-$variance criterion to select portfolio.

$(2$ points$)$