Question: Problem 1 (20 points). Suppose there are only two tradable assets: S&P 500 and a TBill. The S&P 500 index has an expected return of

Problem 1 (20 points). Suppose there are only two tradable assets: S&P 500 and a TBill. The S&P 500 index has an expected return of 15% and a standard deviation of returns of 25%. The risk-free rate is 3%. a) What is the slope of the Capital Allocation Line (CAL)? {this is equal to the Sharpe Ratio of your MVE)

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