Assume that there is a bank account with fixed interest rate 4%, and two stocks A and B with random returns whose statistics is

mean variance Return of A 14% 0.06 Return of B 10% 0.05

and the covariance is -0.02. The investor has initial wealth of $10, 000. (1) Find the portfolio that minimizes the variance of return, if the target expected return equals 10%. (2) Find the portfolio that maximizes the mean of return, if the target variance return equals 0.03.