Using reports from various security analysts, you identify the following efficient

portfolios. Risk-free rate is 6%.

Portfolio Expected return Standard deviation

1 12% 8%

2 15% 10%

3 18% 15%

a) Which portfolio is the best to you? Why? Explain briefly what is compared

in your analysis.

b) If a standard deviation of 13% were acceptable, what would the expected portfolio return be and how would you achieve it?

c) If an expected return of 13.2% were acceptable, what would the standard deviation of portfolio return be and how would you achieve it?