Question: My question is D,E and F. do not answer A,B and C! I got the answer below, can anyone please show me the steps on

My question is D,E and F. do not answer A,B and C!

I got the answer below, can anyone please show me the steps on how to solve them?

My question is D,E and F. do not answer A,B and C!

I got the answer below, can anyone please show me the steps

on how to solve them? 1. You performed security analysis on two stocks and arrived at the following estimates: Stock A Stock B 4%

1. You performed security analysis on two stocks and arrived at the following estimates: Stock A Stock B 4% 3% Alpha 0.6 Beta Standard deviation 4% of residuals The risk premium of the market portfolio is 7% and its standard deviation is 14%. Use the Treynor-Black model to find the answer to the following questions: a) What is the optimal weight the active portfolio should put in stocks A and B? b) What is the optimal weight of the active portfolio in the risky portfolio? c) Find the alpha and beta of the active portfolio, the beta of the optimal risky portfolio and Its Standard deviation

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