Stocks A & B have the expected returns and standard deviations shown in the table below:

Stock	E(R)
A	15%	30%
B	25%	50%

The correlation between A and B is 0.5. The risk-free rate is 3% and you have a risk-aversion parameter of 4.

What is the proportion of your investment in A and B, respectively, in your optimal risky portfolio?

		44.4% in A; 55.6% in B
		55.6% in A; 44.4% in B
		87.5% in A; 12.5% in B
		62.5% in A; 37.5% in B
		12.5% in A; 87.5% in B

XYZ has a standard deviation of 0.32. The market has an expected return of 0.1 and standard deviation of 0.2. The correlation between XYZ and the market is 0.3. The risk-free rate is 0.06. According to the capital asset pricing model (CAPM), the expected rate of return on security XYZ is equal to

	A.	7.92%
	B.	10.8%.
	C.	6.38%
	D.	7.20%
	E.	4%