3. Consider two efficient portfolios A and B and a market index M with a return of 13% and a risk (standard deviation) of 5%. An investor will place 40000$ of his investment budget in portfolio A and the difference in B. The risk premium expected by the investor is 11.2% and the Sharpe ratio of his portfolio (combining A and B) is 2. a. What is the beta of the investor's portfolio? b. What amount has the investor placed in portfolio B? The risk (standard deviation) of A is 4% and the covariance between A and B is 0.24%. c. What is the expected return at equilibrium for a stock with a beta of 1.5 trading on this market? d. If you had a budget of 500000$ how would you construct an efficient portfolio on this market? 3. Consider two efficient portfolios A and B and a market index M with a return of 13% and a risk (standard deviation) of 5%. An investor will place 40000$ of his investment budget in portfolio A and the difference in B. The risk premium expected by the investor is 11.2% and the Sharpe ratio of his portfolio (combining A and B) is 2. a. What is the beta of the investor's portfolio? b. What amount has the investor placed in portfolio B? The risk (standard deviation) of A is 4% and the covariance between A and B is 0.24%. c. What is the expected return at equilibrium for a stock with a beta of 1.5 trading on this market? d. If you had a budget of 500000$ how would you construct an efficient portfolio on this market