You are an active portfolio manager. You received the following information regarding the expected market excess returns, market variance, and the risk-free rate:

Market: E(RM) = 0.12, 2M=0.16; rf = 0.02

You also received information regarding four candidate securities for your active portfolio A:

Security	i	i	i
1	0.06	1.10	0.60
2	0.03	0.90	0.50
3	-0.01	1.20	0.32
4	0.02	0.80	0.40

Your tasks are:

1a) Generate active portfolio A (report weights wA1, wA2, wA3, and wA4)

1b) Calculate key parameters of portfolio A (report A , A, 2A; RA, 2A, cov(RA, RM))

1c) Use the information regarding M, rf, and A to produce the parameters of the improved portfolio P (report wM*, wA*, E(rP), and P)

1d) Produce a simple graph that outlines the locations of M, A, and P in the E(r)- plane.