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

question 21

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 1] Refer to Exhibit 7-4.Determine the minimum variance portfolio that yields an expected annual return of at least 0.10

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Definitions:

HR Forecasting

The process used in human resources planning to predict an organization’s future need for employees based on its business goals and strategies.

Attrition

The process of reducing an HR surplus by allowing the size of the workforce to decline naturally because of the normal pattern of losses associated with retirements, deaths, and voluntary turnover.

HR Surplus

A situation in which the organization has more human capital than it requires in order to meet its current or forecasted human capital requirements.

Workforce

The total number of a country's or an organization's employees, including both the staff and the workers.