Assume that there are two factors that explain all the variation in asset returns: media and powder sugar. The market consists of three assets with returns 11%,18%, and 23%, respectively. The matrix B, below summarizes the factor exposures of the assets (in the same order as the returns are listed): a. Based on historical experience, Tom Chrysler, the current mayor of Sorryville is quite concerned about both these risk factors. He would now like to know how much it would cost him to fully insure himself against media, or to fully insure himself against powder sugar. Using the information above, calculate the expected return on two insurance policies: one that fully insures against media, and one that fully insures against powder sugar. b. Discuss the relative cost (i.e. expected return) of insuring against media and insuring against powder sugar. Which of these is more expensive, and why? Explain your answer carefully. Assume that there are two factors that explain all the variation in asset returns: media and powder sugar. The market consists of three assets with returns 11%,18%, and 23%, respectively. The matrix B, below summarizes the factor exposures of the assets (in the same order as the returns are listed): a. Based on historical experience, Tom Chrysler, the current mayor of Sorryville is quite concerned about both these risk factors. He would now like to know how much it would cost him to fully insure himself against media, or to fully insure himself against powder sugar. Using the information above, calculate the expected return on two insurance policies: one that fully insures against media, and one that fully insures against powder sugar. b. Discuss the relative cost (i.e. expected return) of insuring against media and insuring against powder sugar. Which of these is more expensive, and why? Explain your answer carefully