2. Assume there is one risk-free asset and one risky asset to invest in for a portfolio. Statistics for each are provided in the following table.

	Risk-free	Risky Asset
Average Return	0.03	0.11
Standard Deviation of Return		0.3

1. Determine the expected return and standard deviation of return for a portfolio that is 25% invested in the risky asset.
2. Determine the expected return and standard deviation of return for a portfolio that is 60% invested in the risky asset.
3. What portfolio allocation would you choose given the return characteristics of the two assets? Explain your reasoning for this choice.