Question #1: Optimal Risky Portfolio [14 Points) Alejandra has decided to create a portfolio consisting of two risky assets: Kohls (Asset A) and the Vanguard Intermediate Bond Index Fund (Asset B), The expected returns and standard deviations of the two assets are given in the table below: Risky Asset Expected Return Standard Deviation Asset A 0.18 0.20 Asset B 0.08 0.10 Assume that the correlation coefficient between the returns of A and B is -0.3 and the risk-free rate of return is 4%. (a) Use the values in the above table to find Alejandra's optimal risky portfolio. In other words, what fraction of the portfolio of risky assets will be held in Kohl's stock (Asset A) and what fraction of the portfolio of risky assets will be held in the Vanguard Intermediate Bond Index Fund (Asset B). [10 Points) (b) Suppose that Alejandra has $300,000 to invest and the proportion of her funds allocated to the risky portfolio (y) is equal to 0.75, while the proportion of her funds allocated to the risk-free asset (1 - y) is equal to 0.25. What is the dollar amount that Alejandra will invest in the risk free asset, Kohl's Stock (Asset A) and the Vanguard Intermediate Bond Index Fund (Asset B)? [4 Points