4a. Compute the expected return and risk on your portfolio using the following information, if you invest 20%, 40% and 40% in assets A, B and C: Expected returns on assets A, B and C, respectively, 10%, 5% and 2%. Standard deviations of A, B and C, respectively, 10%, 6% and 1%. The Covariances between the assets are all zero but the covariance between B and C which is 1.

4b. If you have two assets with expected returns 10% and 5%, respectively, what is the percentage you have to invest in every assets in order to get an expected return of 8%? What would be the risk on that portfolio if the covariance between the two assets is zero?