(a). The optimal risky portfolio in the presence of risk-free asset can be identified on a risk vs return plane by finding ____________. I. the minimum variance point on the Markowitz efficient frontier II. the maximum return point on the Markowitz efficient frontier III. the tangency point of the capital market line and an indifference curve IV. the line with the steepest slope that connects the risk-free rate to the Markowitz efficient frontier

(b).In order for you to be indifferent between the after-tax returns on a taxable corporate bond paying 9% and a tax-exempt municipal bond paying 5.85%, what would your (marginal) tax bracket need to be?

(c).

You purchased 1,000 shares of XYZ stock on margin at $80 per share with an initial margin of 40%. XYZ stock price suddenly drops to $50 and you received a margin call. You want to partially liquidate your position and repay the loan with the proceeds in order to meet the maintenance margin requirement of 30%. You need to sell at least _________ (rounded up to the nearest whole number).

A 869 shares

B 865 shares

C 867 shares

D 863 shares