Portfolio and risk and weights of individual assets

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RDFOOD has following two assets in portfolio and risk and weights of individual assets are given below:

Textile FOOD

Return (%) 19 15

Standard deviation (%) 9.5 11

Correlation coefficient 0.62

Covariance 26.08

Weight 48% 52%

-Calculate the risk and return for the portfolio using Markowitz Portfolio theory and interpret findings comparing with efficient portfolio.

-Demonstrate security market line (SML) to depict the undervalued and overvalued stocks from your own portfolio and justify investment decision that already taken by you.

-Draw CML and CAL using data from your own portfolio and justify your answer comparing with market portfolio. How indifference curve shows investors risk preference and aversion behavior with utility score?

Reference no: EM133070319

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