1. The universe of available securities includes two risky stock funds, A and B, and T-bills. The data are as follows: Expected Return Standard Deviation A 12% 18% B 15% 25% T-bills 5% 0 The correlation coefficient between A and B =0.4. 1) What is the covariance between funds A and B? Covariance (X, Y) = -1 Prob(x, y)((x E(X))(y E(y)) Covariance (X, Y) = Lxxaxax - 2) Find the optimal risky portfolio, P, and its expected return and standard deviation 3) Find the slope of the CAL supported by T-bills and portfolio P. 4) How much will an investor with A = 4 invest in funds A and B and in T-bills?