You have $5000 to invest and decide to purchase $1500 worth of T-bills and invest the rest in a risky portfolio of stocks and bonds. The one-year T-bill rate is 2%. The expected return on the risky portfolio is 15% and the standard deviation is 18%. Calculate:

1. Risk premium
2. Sharpe Ratio
3. Draw the CAL (Capital Allocation line). Clearly mark the risk-free rate (R_f), expected return on the risky portfolio [E(R_p)], standard deviation (_p), and risk premium [E(R_p) R_f] on your graph.