3. The Treasury bill rate is 1.5% and the expected return on the market portfolio is 6.5%. The standard deviation of the return on the market portfolio is 16%. Burlington Stores, Inc (BURL) has a beta of 0.27 and a volatility of 25%. Canada Goose Holdings, Inc (GOOS) has a beta of 3.1 and a volatility of 57%. The correlation between the returns on the two stocks is 0.23. Assume that both stocks are correctly priced according to the CAPM.

a. What portfolio P, combining the two stocks (BURL and GOOS), has an expected return of 25%? (You have to find the weight on BURL, BUURL, and the weight on GOOS, GOOS, such that the expected return on the portfolio is 25%.)

b. What is the standard deviation of the portfolio from part a?

c. What is the beta of the portfolio from part a?