A market consists of two risky assets and one riskless asset. Asset 1 has a return of 8% and a risk of 10%. Asset 2 has a return of 16% and a risk of 30% The correlation between the returns of the two assets is - 1 (minus one)
a) Find the weights of a portfolio consisting of Asset 1 and Asset 2 only which has zero risk.
b) What is the return of the riskless asset in the market?
I believe i have solved question a but am unsure. I used the equation σp=|w1σ1 - w2σ2| as we have a correlation of -1. rearranging to find the weights as .75 and .25
However when i come to b i have no idea where to start, any guidence as to where to begin would be helpful
Just use $$r_p = w_1 r_1 + w_2 r_2 = \frac34 \cdot 0.08 + \frac14 \cdot 0.16 = 0.1$$ So the combined return is $10\%$.