A portfolio manager summarizes the input from the macro and micro forecasters in the following table:

Macro Forecasts
Asset	Expected Return (%)			Beta	Residual Standard Deviation (%)
Stock A		21		1.1		60
Stock B		14		1.5		72
Stock C		12		0.6		63
Stock D		10		0.9		53

Macro Forecasts
Asset	Expected Return (%)			Standard Deviation (%)
T-bills		6			0
Passive equity portfolio		12			18

Calculate the following for a portfolio manager who is not allowed to short sell securities.

a.	What is the cost of the restriction in terms of Sharpe’s measure?

Cost of restriction _______??

b.	What is the utility loss to the investor (A = 2.6) given his new complete portfolio?

Cases	Utility levels
Unconstrained	________%??
Constrained	________%??
Passive	________%??