6. You have $450,000 to invest. You plan to put $270,000 in stocks and the rest in bonds. The stocks have a return of 13% and a standard deviation of 20%. The bonds have a return of 8% and a standard deviation of 12%. The correlation between stocks and bonds is 0.4. What is your overall expected return and expected risk from this portfolio? What is the Sharpe Ratio of this portfolio when the T-bill rate is 4%?

7. Jenny has a risk-aversion indicator at the value of 4. Should Jenny prefer the stocks or the bonds provided in Question 6. Casey has a risk-averse indicator of 2. Should Casey prefer the stocks or the bonds? Please calculate the utilities of both of them. Which person is more risk averse?

8. GE, Inc has a beta of -0.45. When S&P500 index increases by 8% and the T-bill rate is 1%. What is the expected return of the company?