An investor can construct a risky portfolio based on two stocks, X and Y. Stock X has an expected return of 18% and a standard deviation of return of 20%. Stock Y has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of X and Y is 0.5. The risk-free rate of return is 10%.

a. What is the covariance of Stock Xs return and stock Ys return?

b. What is the expected return on the optimal risky portfolio?