The shares of company A (A) and company B (B) are the only risky investments in the market. Assume the following parameters of shares of the companies: E (r_A) = 12%, E (r_B) = 25%, _A = 30% _B = 40%, _AB = -0.005 In addition, the market offers a risk-free interest rate r_f 2%. A portfolio of shares and risk-free interest can be created without restriction.

The investor has a return target of approximately 10.0% and accordingly decides to create a portfolio in which the weights of the investments are as follows: share A 17%, share B 41% and risk-free interest rate 42%.

The investor considers himself rational and wants to use portfolio theory and would like to act accordingly. Make relevant calculations and comment with couple lines