Consider the following capital market: a risk-free asset yielding 2.25% per year and a mutual fund consisting of 70% stocks and 30% bonds. The expected return on stocks is 14.50% per year and the expected return on bonds is 3.50% per year. The standard deviation of stock returns is 35.00% and the standard deviation of bond returns 15.00%. Correlation between stocks and bonds is .25

a. An investor has the utility function where the investors utility score = expected return 1/2 x A x variance, and the investor is considering investing in the optimal risky portfolio and the riskfree asset from problem 5. If the investors coefficient of risk aversion constant A is 1.75, what is their optimal portfolio weight to invest in the optimal risky portfolio to form their complete portfolio?

b. What is the expected return on this investors complete portfolio?

c. What is the standard deviation of this investors complete portfolio?

d. Using previous answers, what is the Sharpe ratio of this investors complete portfolio? Note that the Sharpe Ratio is shown as a number rather than a percentage.