The annual estimates of the parameters for Boeing (B) and Microsoft (M) stocks are given below: meanB = 0:1492; meanM = 0:3308; varB = 0:0695; varM = 0:1369; correlation p(M,B) = -0:0083 Assume a risk-free rate of 3% per year for the T-bill (risk free rate) (a) Compute Sharpe ratio for Boeing and Microsoft. Which asset has the highest slope value? (b) Compute the minimum variance portfolio among all the portfolios that mix the two stocks (specify the portion invested in each stock) (c) Find the Sharpe ratio of the minimum variance portfolio in the previous question (d) Find the tangency portfolio (you can use the formula's given in class or use R to obtain it) (e) Find the marginal risk and the risk contribution of each asset to the tangency portfolio (see problem 3 for the de nition of these quantities) (f) Consider a portfolio that has 30% in the tangency portfolio and 70% in T-bills. In this portfolio, what is the percent invested in Boeing and what is the percent invested in Microsoft? (g) Compute the mean for this portfolio. (h) Compute Sharpe ratio for this portfolio (i) Suppose you want a 10% expected return. Compare (in terms of risk) The best portfolio of only the two stocks the best portfolio of the two risky stocks and the risk free assets.