Show the given situation on an s

Show the given situation on an s - r diagram

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Reference no: EM13905160

Suppose there are n assets which are uncorrelated. (They might be n different "wild cat" oil well prospects.) You may invest in any one, or in any combination of them. The mean rate of return r is the same for each asset, but the variances are different. The return on asset i has a variance of s2 i for i = 1,2,· · · ,n.

(a) Show the situation on an s - r diagram. Describe the efficient set.

Reference no: EM13905160

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