The universe of available securities includes two risky stock funds, A and B$,$ and T$-$bills. The data are as follows: $(16)$

Expected Return Standard Deviation

A $9\mathrm{.}5\%20\%$

B $13\mathrm{.}5\%35\%$

T$-$bills $4\mathrm{.}5\%0$

The correlation coefficient between A and B $=0\mathrm{.}35.$

$1)$ What is the covariance between funds A and B$?$

$2)$ Find the optimal risky portfolio, P$,$ and its expected return and standard deviation

$3)$ Find the slope of the CAL supported by T$-$bills and portfolio P$.$

$4)$ How much will an investor with A $=4$ invest in funds A and B and in T$-$bills?

$1)$ Covariance $=\backslash$rho xy $\backslash$sigma x$\backslash$sigma y $=0\mathrm{.}35*20\%*35\%=0\mathrm{.}0245$