Exhibit 7-4 You Are Given the Following Means, Standard Deviations, and Correlations

Essay

Exhibit 7-4
You are given the following means, standard deviations, and correlations for the annual return on three stocks. The means are 0.08, 0.10, and 0.15. The standard deviations are 0.15, 0.20, and 0.30. The correlation between stocks 1 and 2 is 0.62, between stocks 1 and 3 is 0.32, and between stocks 2 and 3 is 0.43.
-[Part 2] Refer to Exhibit 7-4.Determine the minimum variance portfolio that yields an expected annual return of at least 0.12.How has the portfolio changed from your answer in Part 1