The CAL has the following parameters: Risk-free rate is 3 percent, return on the

optimal risky portfolio is 12 percent, with a standard deviation (SD) of 20 percent.

a) What is your expected return if you limit your risk to a Standard Deviation of 10 percent?

b) How do you achieve a 35 percent return using the parameters above? Explain and show precisely how you would achieve the return and also calculate the standard deviation of the portfolio.