You Are Given the Following Means,standard Deviations,and Correlations for the Annual

question 1

Essay

You are given the following means,standard deviations,and correlations for the annual return on three stocks.The means are 0.12,0.15,and 0.20.The standard deviations are 0.20,0.30,and 0.40.The correlation between stocks 1 and 2 is 0.65,between stocks 1 and 3 is 0.75,and between stocks 2 and 3 is 0.41.You have $13,000 to invest and can invest no more than half of your money in any single stock.Determine the minimum variance portfolio that yields an expected annual return of at least 0.14.

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Definitions:

Evangelical Reformers

Individuals motivated by their evangelical beliefs to enact social reforms in the 18th and 19th centuries, focusing on issues like slavery, education, and prison conditions.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior, often guided by personal, cultural, or societal values.

Individualism

A social and political philosophy that emphasizes the moral worth and autonomy of the individual, often opposing external interference upon one's own interests.

David Walker

An African American abolitionist whose 1829 pamphlet “Appeal to the Coloured Citizens of the World” called for the end of slavery and racial discrimination.