Michael and Janine are both investors wanting to purchase investment portfolios. The expected return, standard deviation and beta of various investments are shown in the following table:

InvestmentAverage

return over last year (% pa)Standard

Deviation (% pa)BetaApocryphal Industries15121.7Bona Fide Ltd1181.0Market Index112110 year Bond530

Michael wants a portfolio that has an expected return of 13% pa and that contains only Apocryphal Industries and 10 year bonds.

Janine wants a portfolio with a 60% weighting in Apocryphal Industries and a 40% weighting in Bona Fide Ltd shares. The correlation coefficient between the returns of the shares in Apocryphal Industries and Bona Fide Ltd is 0.6.