1. (20 points) The table below presents the returns on stocks ABC and XYZ for a five-year period. a. (5 points) Assume that the average returns from the data equals the expected returns for the respective stocks. If you want to form a portfolio with expected returns of 15%, what proportion of your assets would you invest in each of these stocks? b. (5 points) What is the standard deviation of this portfolio? c. (5 points) Suppose the risk-free rate is 5%. Compute the slope of the capital allocation lines for ABC and XYZ. Which of these two stocks yields a higher reward-to-risk ratio? d. (5 points) Your boss claims that you should invest only in the stock with the higher rewardto-risk ratio, and never invest in the stock with the lower reward-to-risk ratio. Do you agree? Explain