Suppose that the risk-free rate is 5% and the expected return and the information regarding Intel and Microsoft returns is given by the following: 2_...

a) Describe the return as a function of the standard deviation for the optimal portfolios that combine only Intel and Microsoft, that is, r(st. dev)

b) Describe the return as a function of the standard deviation for the optimal portfolios that combine the three assets, that is portfolios that also include the risk-free asset

Suppose that the risk-free rate is 5% and the expected return and the information regardingIntel and Microsoft returns is given by the following: 2_ 0.0225 0 __ 0.1— 0 0.04 ’T— 0.12 Note: In the above we assume that the first security is Intel; thus, for example, the varianceof Intel is 0.0225 (a) Describe the return as a function of the standard deviation for the optimal portfoliosthat combine only Intel and Microsoft, that is, fla) (b) Describe the return as a function of the standard deviation for the optimal portfoliosthat combine the three assets, that is portfolios that also include the risk—free asset