Question: Problem Details: - Choice between two risky assets - Asset 1 expected return: 4%, standard deviation: 2% - Asset 2 expected return: 5%, standard deviation:

Problem Details:

- Choice between two risky assets

- Asset 1 expected return: 4%, standard deviation: 2%

- Asset 2 expected return: 5%, standard deviation: 3%

- Both asset returns have a correlation coefficient 0.1.

Question 1: Create the objective function to minimize portfolio variance. Short sales are allowed. No constraint on the expected return, fractions invested must add up to 1.

Question 2: What is the smallest amount of risk that you can achieve?

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