Consider a two asset portfolio. An investor allocates fraction of her wealth in asset Band the rest in asset A.Designate this portfolio by p.Expected return on asset A is 1 and the expected return on asset B is 2. Asset A is riskier.There is no short selling allowed.

1.Which asset has a higher expected return? Must explain.

2.Determine the slope, its sign, and the intercept of the portfolio p's expected return. Do simplifications you deem necessary.

3.Plot the portfolio p's expected return as a function of the wealth invested in the riskier asset.