(A small world) Consider a world in which there are only two risky assets. A and B, and a risk-free asset F. The two risky assets are in equal supply in the market: that is, M-률 (A + B). The following information is known: rF = .10, σ1-04, σ&B .01, = .02, and r,-18. (a) Find a general expression (without substituting values) for σ, β, and β
(b) According to the CAPM, what are the numerical values of TA and Fa?

Some years ago it was estimated that the demand for steel approximately satisfied the equation p=194-25x x, and the total cost of producing x units of steel was upper c left parenthesis x right parenthesis equals 145 plus 40 x. (the quantity x was measured in millions of tons and the price and total cost were measured in millions of dollars.) determine the level of production and the corresponding price that maximize the profits.