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

a) What is the weight of stock K in the minimum variance portfolio?

b) what is the expected return and standard deviation of the minimum variance portfolio?

c) what is the weight of stock K in the optimal risky portfolio?

d) what is the expected return on the optimal risky portfolio?

e) what is the standard deviation of return on the optimal risky portfolio?