1)You invest in a minimum variance portfolio of two stocks, BEAR and BULL. The expected return on BEAR is 18% and its variance is 0.04. The expected return on BULL is 12% and its variance is 0.0025. The correlation coefficient between BEAR and BULL is -0.5. The weight on BEAR in your portfolio is ____.

2) You short 1000 shares of WIC Group (WIC) at $40 per share and give your broker $23,000 to establish your margin account. WIC pays no dividends. If you earn no interest on the funds in your margin account, what will be your rate of return if WIC stock is selling immediately (t=0) at $46?

3) Consider the CAPM model.Stock APR has a risk premium of 13%, and its standard deviation is 18%.The market index has a risk premium of 12%.The T-bill rate is 2%.The correlation between APR and the market index is 0.1735.What is the standard deviation of the market index?