Assume that the estimated mean and standard deviation of


Question: Add a new stock, stock 4, to the portfolio optimization model. Assume that the estimated mean and standard deviation of return for stock 4 are 0.125 and 0.175, respectively. Also, assume the correlations between stock 4 and the original three stocks are 0.3, 0.5, and 0.8. Run Solver on the modified model, where the required expected portfolio return is again 0.12. Is stock 4 in the optimal portfolio? Then run Solver Table as in the example. Is stock 4 in any of the optimal portfolios on the efficient frontier?

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Mathematics: Assume that the estimated mean and standard deviation of
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