Exercise 3. CML formulation and graph (01 marks) Assume there are just three risky securities in the market portfolio Security A, which constitutes 40% of this portfolio, has an expected return of 10% and a standard deviation of 20%. Security B has an expected return of 15% and a standard deviation of 28%. If Corr (A,B)-0.2, and the risk free rate 5%, calculate and draw the capital market line. 3. The variable (A) in the utility formula represents the: a. investor's return requirement. b. investor's aversion to risk. c. certainty equivalent rate of the portfolio. d. preference for one unit of return per four units of risk. Exercise 3. CML formulation and graph (Ol marks) Assume there are just three risky securities in the market portfolio. Security A, which constitutes 40% of this portfolio, has an expected return of 10% and a standard deviation of 20%. Security B has an expected retum of 15% and a standard deviation of 28%. If Corr (A.B)- 0.2. and the risk free rate 5%, calculate and draw the capital market line