PORTFOLIO OF A RISK-FREE ASSET AND A RISKY ASSET You are considering investing in a combination of a stock and a risk-free asset. The stock has an expected return of 7% and standard deviation of return of 15%, and a risk free asset with return of 3%. Part a. Complete the table below, and graph the expected portfolio return as a function of the portfolio standard deviation. Part b. Suppose you are investing $1000. What is the meaning of a portfolio invested 150% in the risky asset? o 7% Expected stock return Stock standard deviation Risk-free rate 15% 3% Portfolio standard deviation Portfolio expected return #N/A 8% 7% 6% Stock Proportion of stock in portfolio 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 5% Portfolio expected return 4% 3% rf 2% 1% 0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Portfolio sigma Section b. PORTFOLIO OF A RISK-FREE ASSET AND A RISKY ASSET You are considering investing in a combination of a stock and a risk-free asset. The stock has an expected return of 7% and standard deviation of return of 15%, and a risk free asset with return of 3%. Part a. Complete the table below, and graph the expected portfolio return as a function of the portfolio standard deviation. Part b. Suppose you are investing $1000. What is the meaning of a portfolio invested 150% in the risky asset? o 7% Expected stock return Stock standard deviation Risk-free rate 15% 3% Portfolio standard deviation Portfolio expected return #N/A 8% 7% 6% Stock Proportion of stock in portfolio 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 5% Portfolio expected return 4% 3% rf 2% 1% 0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Portfolio sigma Section b