Portfolio R Offers an Expected Return of 12% with a Standard

question 19

Essay

Portfolio R offers an expected return of 12% with a standard deviation of 20%. Portfolio S has an expected return of 8% with a standard deviation of 10%. The correlation of the portfolios' returns is 0.5.
-Refer to the information above. Mr. Reliable says that it is obvious that everyone
should want to invest only in Portfolio R since it offers a higher rate of return than
investing in any combination of Portfolio R and Portfolio S. Respond to Mr. Reliable.

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Definitions:

Colleagues

Individuals with whom one works, especially within a profession or a specific project group.

Memo

A short document or note that is used for communication within an organization, often to inform employees about policies or announcements.

Email

Electronic mail, a method of exchanging digital messages over the internet.

Specific Purpose

A clear statement defining the goal or objective that a particular activity, document, or speech aims to achieve.