Suppose you are a head of a hedge fund and are thinking to create a portfolio investing just in these three stocks. The portfolio weights, volatility and correlation with the market portfolio of the three stocks are given in the table below:Portfolio weightVolatilityCorrelation with the market portfolioYahoo0.2512%0.4Microsoft0.3525%0.6Google0.413%0.51. If you expect to receive a rate of return 9% on this portfolio , would you invest in this portfolio? Explain?2. Assume the CAPM correctly prices risk, is the market portfolio efficient? Explain why.

Suppose you are a head of a hedge fund and are thinking to create a portfolio investing just in these three stocks. The portfolio weights, volatility and correlation with the market portfolio of the three stocks are given in the table below:Portfolio weightVolatilityCorrelation with the market portfolioYahoo0.2512%0.4Microsoft0.3525%0.6Google0.413%0.51. If you expect to receive a rate of return 9% on this portfolio , would you invest in this portfolio? Explain?2. Assume the CAPM correctly prices risk, is the market portfolio efficient? Explain why.

Suppose you are a head of a hedge fund and are thinking to create a portfolio investing just in these three stocks. The portfolio weights, volatility and correlation with the market portfolio of the three stocks are given in the table below:Portfolio weightVolatilityCorrelation with the market portfolioYahoo0.2512%0.4Microsoft0.3525%0.6Google0.413%0.51. If you expect to receive a rate of return 9% on this portfolio , would you invest in this portfolio? Explain?2. Assume the CAPM correctly prices risk, is the market portfolio efficient? Explain why.