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Draw a Graph That Represents an Opportunity Set for a Two-Asset

question 21

Essay

Draw a graph that represents an opportunity set for a two-asset combination.Indicate four points on the graph as follows: (1)the minimum variance portfolio.(2)point (A)which represents the best return to risk combination,(3)point (B)which provides the same return but with more risk than point (A)and,(4)point (C)which has the same risk but a lower return than point (A).Lastly,indicate the efficient frontier.

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Definitions:

Solve

To solve an equation means to find all possible values of the variable that make the equation true.

Expression

A combination of symbols that represent a quantity or formula, which can include numbers, variables, and operation symbols.

Solve

To find the value(s) of variable(s) that satisfy an equation, inequality, system of equations, or other mathematical conditions.

Expression

A combination of symbols and operators in mathematics that represents a value.

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