1. Use the following information to answer the questions.

Security	Beta	Standard Deviation	Expected return
S&P 500 Risk-free security Stock A Stock B Stock C	1.0 0.0 0.6 ( ) 1.2	20% 0% 15% 30% 25%	8.0% 4.0% ( )% 12.0% ( )%

1. You form a complete portfolioby investing $6,000 in S&P 500 and $4,000 in the risk-free security. Given the information about S&P 500 and the risk-free security on the table, figure out the following.

1. Figure out thestandard deviation of the complete portfolio. (15points)

2. Figure outthe slopeof the Capital Allocation Line (CAL). (25points)

1. A complete portfolio is composed of the risk-free security and a risky portfolio, Q, constructed with two risky securities, X and Y. Given the risk-free rate of 4%. X has an expected return of 10%, and Y has an expected return of 20%.

1. Given the expected returnof 14% for the risky portfolioQ, what arethe weights for X and Y, respectively? (15points)

2. You would like to form a complete portfolio with the expected return of 19%. What are the wightsfor the risk-free securityand the risky portfolio Q, respectively? (15points)