1. Consider the table below showing return and risk for two funds.

Mutual Funds	Returns	Standard Deviation
Fund A : Well diversified value fund	9%	17%
Fund B: A risk less Fund	3.5%	0%

A. Calculate and show risk and return for a security consisting of 60 % in risky fund and 40 % risk less fund, in the context of the CAPM. Show calculations. (25 points)

B. Calculate and show return and risk for a portfolio consisting of 125 % in risky fund in the context of CAPM. Show calculations. (20 Points)