- Assuming that Chris Lee will invest all funds in the five stocks of interest, what portion should be invested in each?
- If Chris also considers keeping some of the funds in cash savings with a 1% annual rate of return, will the optimal allocation change? If so, how?
- Try to construct a chart which reflects the efficient frontier. That is, with a range of expected returns lying on the horizontal axis, and vertical positions representing the least possible risk (standard deviation) for each level of return. How does this support your previous decision(s)?