The stock of Bruin, Inc., has an expected return of 14 percent and a standard deviation of 57 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 42 percent. The correlation between the two stocks is .25. Is it possible for there to be a minimum variance portfolio since the highest-return stock has the lowest standard deviation? If so, calculate the expected return and standard deviation of the minimum variance portfolio. Graph the investment opportunity set for these two stocks.
This question was answered on: Jul 11, 2017
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