The market index model can be formulated as: Rte=+RM,te+t, where Rte denote the annual excess returns of the risky asset and , RM,te is the excess annual return on the market index, S\&P 500. There are two risky funds, A and B, and their returns follow the above market index model. The estimations of annual means, annual standard deviations, and the parameters of the index model for Funds A and B and the S\&P 500 index are in the table below. An investor wants to invest $10 thousands into funds A and B, and he plans to allocate 70% of his capital into A and the remaining into B. (A) What would be the alpha, beta, and R-squared for his portfolio (the combination of Funds A and B) under the market index model? (6\%) (B) If this investor would like to short sell a hedging portfolio, constructed with S\&P 500 index portfolio and the risk-free asset, to make his overall position market neutral, what is the dollar amount of the hedging portfolio should they short sell? (3\%) (C) Please calculate the variance and Sharpe ratio of the overall position constructed in part (B). (6\%)