PLEASE ANSWER BOTH PARTS:

PART A:

The return statistics for two stocks and the risk-free asset, Treasury bills, are given below:

	A	B	C	D
1		Stock A	Stock B	T-bills
2	Expected return	0.096	0.079	0.02
3	Variance	0.1225	0.0729
4	Standard deviation	0.35	0.27
5	Covariance	0.02835

-What is the Sharpe ratio of the optimal risky portfolio?

-What is the standard deviation of a portfolio composed of 90% optimal risky portfolio and 10% risk-free asset?

PART B:

You have $18,000 and want to invest it in the two stocks below and the risk-free asset, Treasury bills:

	A	B	C	D
1		Stock A	Stock B	T-bills
2	Expected return	0.093	0.061	0.02
3	Variance	0.1156	0.0729
4	Standard deviation	0.34	0.27
5	Covariance	0.02754

-What is the Sharpe ratio of the optimal risky portfolio?

-What is the standard deviation of a portfolio composed of $1,800 optimal risky portfolio and $16,200 risk-free asset?

-Still assuming a portfolio composed of $1,800 optimal risky portfolio and $16,200 risk-free asset, how much money should you invest in stock B (in $)?