In Simpleland there are only two risky stocks, A and B, with details listed below.

	Number of outstanding Shares	Price per share	Expected rate of return	Standard deviation of return
Stock A	800	$0.50	10%	14%
Stock B	500	$1.20	15%	20%

Furthermore, the correlation coefficient between the returns of stocks A and B is _AB = 1/6. There is also a risk-free asset, and Simpleland satisfies the CAPM exactly.

(Keep 4 decimal places to your answers.)

(a) What is the expected rate of return of the market portfolio? _____________

(b) What is the standard deviation of the return of the market portfolio? ______________

(c) What are the values of _A and _B?

_A: ___________ _B: _________________

(d) What is the risk-free rate in Simpleland? ____________