Suppose there are only two tradable assets: S&P 500 and a T-Bill. 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)

b) What is the composition of a portfolio on the Capital Allocation Line that has an expected return of 20%? What is the standard deviation of this portfolio?