Assume the universe of available securities consists of two risky assets: A and B. The expected return for A is 10% and 30% for B. The variance for returns for A is 400(%squared) and for B is 3600(%squared). The covariance between A and B returns is -0.05. T-bills give a return of 5% with a standard deviation of 0%. The investor has a risk aversion index, A=5.0.

1. calculate the slope of CAL

2. how must will the investor invest in T-bills, asset A and B?

3. sketch a graph where there are frontier for assets A and B, CAL and indifference curve to show the optimal complete portfolio (w the return and SD for the GMBP)