1. (a)Suppose different hospitals within Partners system choose different mixes of the "risk-

free" Short Term Projects and baseline Long Term Project, whose future expected returns and risks are shown in

Exhibit 3. On Exhibit 3,

plot the returns and risks of the various potential portfolios that

can be formed by allocating funds between the STP and baseline LTP

. What shape does a

line drawn through these portfolios take? Why?

In contrast, what would the risk-return

opportunities available to the hospitals be if they could invest only in STP and US

Equities? (I have added the entire case plus the data supplements)