An investor has $1,000,000 invested in US government bond with an average annual return of 3%. The investor decides to invest 60% of her money on a tech stock that has an average annual return of 8%. The variance of the tech stock is estimated to be .002025.

a. What is the variance of the portfolio created by combining government bond and the tech stock? [ ]

b. What is the expected return to investors portfolio? [ ]

c. Find the Sharpe ratio. [ ]

d. Write the equation of the Capital Allocation Line, CAL. [ ]

e. What will be the expected return if the investor takes 6% risk on her portfolio?