Plot the feasible set or the opportunity set

Reference no: EM131477331

Question: Suppose that mutual fund A has an expected return of 10% and a standard deviation of 15%. Mutual fund B has an expected return of 15% and a standard deviation of 30%. The correlation coefficient between A and B is +0.3.

(1) Please plot the feasible set or the opportunity set, i.e., attainable portfolios, by alternating the mix between the two funds.

(2) What are the expected return and standard deviation for a portfolio comprised of 30% fund A and 70% fund B?

(3) Suppose that the risk-free asset has an expected return of 5%. Using only fund B and the risk-free asset, plot the feasible.

Reference no: EM131477331

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