3.[10 points] Consider a market with three assets (one bond, two stocks) that fulfills the assumptions of CAPM. The risky returns R and R2 are correlated with P12 = 1/3 and the following data is known: R1 R2 shares 200 150 price 50 200 8% 12 14% 02 (a) (3pts) Find M2 and 02 such that the market portfolio fulfills um = 14% and om = 16.5%. (b) (3pts) What is the of each stock? (c) (2pts) What is the risk-free rate r of the market? (d) (2pts) Is (u,0) = (22.63%, 17.96%) or (17.96%, 22.63%) on the capital market line? 3.[10 points] Consider a market with three assets (one bond, two stocks) that fulfills the assumptions of CAPM. The risky returns R and R2 are correlated with P12 = 1/3 and the following data is known: R1 R2 shares 200 150 price 50 200 8% 12 14% 02 (a) (3pts) Find M2 and 02 such that the market portfolio fulfills um = 14% and om = 16.5%. (b) (3pts) What is the of each stock? (c) (2pts) What is the risk-free rate r of the market? (d) (2pts) Is (u,0) = (22.63%, 17.96%) or (17.96%, 22.63%) on the capital market line