You survey a client and you conclude that she can tolerate a standard deviation T of at most 12%. You can allocate your client's wealth into a corporate bond fund, a common stock fund, and a U.S.TBills (risk-free), with the following means and standard deviations: The correlation between the stock fund and the bond fund is BS=0.7. a) Find the optimal risky portfolio ( 5 points) b) Find the expected return and risk of the optimal risky portfolio (5 points) E(Rrisky)= risky= 0 c) Draw the Capital Allocation Line of the optimal risky portfolio. (5 points) - Clearly identify the risk and retum of the optimal risky portfolio - Clearly identify the risk free rate - Find the Shame ratio of this CAL c) Draw the Capital Allocation Line of the optimal risky portfolio. (5 points) - Clearly identify the risk and retum of the optimal risky portfolio - Clearly identify the risk free rate - Find the Sharpe ratio of this CAL d) Find the weights your client should allocate into the bond fund (wB), the common stock fund (ws), and into the risk-free asset (wf). (Remember that wB+ws+wf=1). (5 points) wB=wS=%wrf=%% e) Finally, find the return of the portfolio that you found in d). Verify that the standard deviation of the risky portfolio is exactly 15%. (5 points) e) Finally, find the return of the portfolio that you found in d). Verify that the standard deviation of the risky portfolio is exactly 15\%. (5 points) E(Rfinal)=%final=