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:

Inferior Rectus

A muscle in the eye that primarily aids in looking downward and contributes to the rotation of the eyeball.

Linea Alba

A fibrous structure that runs down the midline of the abdomen, providing attachment for abdominal muscles.

Serratus Anterior

The serratus anterior is a muscle that originates on the surface of the 1st to 8th ribs at the side of the chest and inserts along the entire anterior length of the medial border of the scapula, playing a crucial role in the movement of the shoulder blade.

Rectus Abdominis

A major abdominal muscle that helps in movements of the trunk and stabilizes the pelvis.