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Business, 10.03.2020 03:53 avery8626

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 asset but the variances are different. The return on asset i has a variance σi^2 for i= 1,2,...n

a. Describe the efficient set for this situation
b. Write a formula for the minimum-variance point. Express your result in terms of
n
σ^2= ( Σ 1/σi^2)
i=1

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