Question: 3. (20 points) Consider a world with two risky assets, A and B, and a risk-free asset.. Stock A has price per share $6, 3000

3. (20 points) Consider a world with two risky assets, A

3. (20 points) Consider a world with two risky assets, A and B, and a risk-free asset.. Stock A has price per share $6, 3000 shares outstanding, = and ^= 1. Stock B has price per share $3, 2000 shares outstanding,fB-1, and B-2. The stocks are correlated: PAB =is the correlation (*"Nor.. the covariance) (a) What is the expected return rM of the markct portfolio? (b) What is the variance e of the market portfolio? (e) What are the covariance ,M and the beta fin of stock B? (d) Assume CAPM. What is the risk-free rate r

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