Suppose there are 2 stocks in the market, stocks A and C, with the following properties: Expected Return Standard Deviation TA = 5% A = 10% TC = 20% oC = 40% A C The returns on stocks A and C are not correlated. There is a riskless asset with guaranteed return of 3%. Suppose there are two investors, X and Z, who maximize risk-return tradeoff and have mean- variance preferences. Investor X can only invest in stocks A and C. Investor Z, in addition to being able to invest in stocks A and C, can also invest in the riskless bond. Investor X targets standard deviation of 20% and investor Z targets standard deviation of 12%. (a) What is the maximum Sharpe ratio investor X can achieve? (b) What is the maximum Sharpe ratio investor Z can achieve? (c) Describe the portfolio of investor Z. What is the expected return of this portfolio? (d) If investor X had access to the risk-free asset, could her return have been improved? If yes, compute the expected return for a 20% target level of risk.