Intro Assume that there are only two stocks in the economy, stock A and stock B. The risk-free asset has a return of 3%. The optimal risky portfolio, i.e., the portfolio with the highest Sharpe ratio, is given below: A B D 1 Stock A Stock B Risk-free asset 2 Expected return 0.062 0.077 0.03 3 Variance 0.09 0.0484 4 Standard deviation 0.3 0.22 5 Covariance 0.0198 0) Optimal risky 7 portfolio 8 Weights 9 Expected return 10 Variance 11 Standard deviation 12 Sharpe ratio 0.1467 0.0748 0.04214 0.853= 1-B8 =B8*B2+C8*C2 =B8^2*B3+C812*C3+2*B8*C8*B5 =B10^0.5 =(B9-D2/B11 0.2053 0.2182 Part 1 Attempt 1/10 for 7.1 pts. What is the expected return of a portfolio composed of 50% of the optimal risky portfolio and 50% of the risk-free asset? 3+ decimals Submit Attempt 1/10 for 7.1 pts. Part 2 What is the standard deviation of such a portfolio? 3+ decimals Submit