Question 2 (total of 12 marks): An investor has a portfolio of two securities, stock XYZ and an exchange traded func (ETF) that tracks the ASX200 and charges negligible fees. Assume that the ASX200 ETF is the market portfolio. The following table summarises the investors' holdings. Assume that returns are effective annual rates or net discrete returns. Portfolio Details XYZ ASX200 ETF Investment $40,000 $60,000 Expected return 6% pa 7% pa Total standard deviation 30% pa 25% pa Beta ? 1 Correlation of returns between XYZ and ASX200 0.65 Question 2f (2 marks): Assuming that stock XYZ and the ETF are fairly priced, calculate the risk free rate. Answers: Please answer all parts of the