1A.

1B.

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Suppose that you have $100,000 invested in the market portfolio and that the stock price of Taggart Transcontinental suddenly drops to $7.80 per share. Which of the following trades would you need to make in order to maintain your investment in the market portfolio: 1.Buy approximately 1140 shares of Taggart Transcontinental 2.Sell approximately 256 shares of Rearden Metal 3.Sell approximately 57 shares of Wyatt Oil 4.Sell approximately 148 shares of Nielson Motors A. 1, 2, 3, and 4 B. 2 only C. 2,3 , and 4 only D. 1 only E. None of the above If the risk - free rate is 5% and the expected return of investing in Merck is 11.3%, then the expected return on the market must be: A. 10.4% B. 8.0% C. 12.0% D. 10.0%