Q: Using the estimation technique described in Step 3.1, what percentage of your investment would you allocate to WFC and MSFT, respectively, to arrive at a portfolio with the minimum variance?
or
Q: How much of your investment would you put into WFC and MSFT, respectively, using the estimating method outlined in Step 3.1 in order to create a portfolio with the least amount of variance?
- 60%; 40%
- 55%; 45%
- 45%; 55%
- 40%; 60%
Explanation: If you’d like, I can help calculate this if you provide the variances (or standard deviations) and the covariance between WFC and MSFT. Otherwise, given these choices, it’s likely the answer is closest to 60% in WFC and 40% in MSFT, but verifying with data would be best for accuracy.
