1. You have $500,000 available to invest. The risk-free rate, as well as your borrowing rate, is 8%. The return on the risky portfolio is 16%. If you wish to earn a 22% return, how should you invest? 2. The Haily Index is a price weighted stock index based on the 5 largest auto-mobiles manufacturers in the nation. The stock prices for the five stocks are $10,$20,$80,$50 and $40. The price of the last stock was just split 2 for 1 and the stock price was halved from $40 to $20. What is the new divisor for a price weighted index