Please answer the following question:
Question 1: In a two-asset portfolio, is the portfolio standard deviation a weighted average of the two individual stocks standard deviation? Explain.
Question 2: What are the two characteristics of points along the efficient frontier? Do portfolios exist above the efficient frontier?
Question 3: Describe the optimum portfolio for an investor in terms of indifference curves and the efficient frontier.
Note: Provide support for your underlying principle.