An analyst in the search for investment opportunities is evaluating the following portfolios of risky assets (assume risk-free rate of 3.75 %):

Portfolio	Exp Return	St.Dev
A	8%	11%
B	11%	14.5%
C	5%	5%
D	11.8%	20%
E	6.4%	8%

a) Estimate the risk premium per unit of risk expected to be received per each portfolio.

b) Which of the portfolios is most likely to be the market portfolio? Draw the CML (define the numerical values of the intercept and slope next to the graph).

c)Suppose the analysts preference is only for making an investment with = 8%, and earning a 10% return. Would this be possible?

d)What is the minimum level of risk necessary for an investment earning 10%? Estimate the portfolio composition (along CML) that can generate an expected return of 10%.

e)Recently Bank of Canada has undertaken monetary policy tightening, which led to a significant increase in the policy interest rate in Canada. Given your answers to d), how would an increase in the risk-free interest rate affect this portfolios composition. Compare changes to the portfolio weights for different levels of the risk-free interest rate and comment on the results.