Please solve it fast ASAP with all requirements

Question 1 Financial asset XYZ pays a single expected cash flow of $100 two years from today. You know the following information about this financial asset and about the market: Risk free rate () is 2%. The expected return of the market portfolio (()) is 6%. The standard deviation of the market portfolio () is 10%. Financial asset XYZ has a standard deviation () of 20%. The beta of asset XYZ () is 1.3. Andy and Bob are two investors in the market. Andy is a well-diversified investor. The beta of Andys portfolio () is 0.8. Bob is a non-diversified investor and wants to invest all his capital in the financial asset XYZ.

a. What is the maximal price that Andy will be willing to pay for the financial asset XYZ?

B. What is the maximal price that Bob will be willing to pay for this asset?

c. Assume that the proportion of the XYZ company in the market portfolio is less than 1%. Also assume that 50% of the investors are Andys type, and 50% of the investors are Bobs type. In this case, what will be the price of the financial asset XYZ?

Question 2 ( Consider the following 2 stocks, A and B, with the following expected returns and standard deviations. Assume no risk-free asset exists: Stock Expected return Standard deviation A 14% 18% B 6% 8%

a. Assume that you invest 20% of your equity in stock A, and 80% of your equity in stock B (that is, =0.2 and =0.8). If the correlation coefficient between A and B is 0.1 (,=0.1), what is the expected return and standard deviation of your portfolio P?

B. Assume now, for this section, that the correlation coefficient between A and B is -1 (,=1). What is the expected return and standard deviation of the portfolio with the lowest variance? (that is, the minimum variance portfolio)

C. Following section (b) above, assume that a risk free asset is introduced to this economy. Can the risk free rate be 4% in this setting? Explain.