You are given $10, 000 in cash to invest in a portfolio consisting of abroad stock index fiind P, and a portfolio of T-bills, F. You know that the expected return on the stock index is 18%, with a standard deviation of 20%, while the return on the T-bill portfolio will be 8%. You can borrow at a fixed rate of 10% as long as you don't borrow more than $5,000. If you need to borrow more, the lending rate becomes 12%. How large is the risk premium? What are the "reward-to-variability" ratios when y lesser than or equal to 1, 1 lesser than or equal to y lesser than or equal to 1.5, and y greater than 1.5? Draw the entire Capital Allocation Line. Consider the following scenario analysis involving asset X and asset Y: Note: Careful with rounding! Compute the expected returns and the standard deviations for both assets. Compute the correlation coefficient between the returns on the two assets. Can you build a portfolio of assets X and Y with zero risk? Prove that your portfolio is indeed riskless. Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 10% and a standard deviation of 16%. B has an expected rate of return of 8% and a standard deviation of 12%. What are the weights of A and B in the minimum variance portfolio? What is the expected return and standard deviation of the MVP