Assume that you recently graduated and landed a job as a financial planner with Cicero Services, an investment advisory company. Your first client recently inherited some assets and has asked you to evaluate them. The client owns a bond portfolio with $1 million invested in zero coupon Treasury bonds that mature in 10 years.47 The client also has $2 million invested in the stock of Blandy, Inc., a company that produces meat-and-potatoes frozen dinners. Blandys slogan is Solid food for shaky times. Unfortunately, Congress and the president are engaged in an acrimonious dispute over the budget and the debt ceiling. The outcome of the dispute, which will not be resolved until the end of the year, will have a big impact on interest rates 1 year from now. Your first task is to determine the risk of the clients bond portfolio. After consulting with the economists at your firm, you have specified five possible scenarios for the resolution of the dispute at the end of the year. For each scenario, you have estimated the probability of the scenario occurring and the impact on interest rates and bond prices if the scenario occurs. Given this information, you have calculated the rate of return on 10-year zero coupon Treasury bonds for each scenario. The probabilities and returns are shown here: \begin{tabular}{lcc} Scenario & \( \begin{array}{c}\text { Probability of } \\ \text { Scenario }\end{array} \) & \( \begin{ You have also gathered historical returns for the past 10 years for Blandy, Gourmange Corporation (a producer of gourmet specialty foods), and the stock market. \begin{tabular}{cccc} & \multicolumn{3}{c}{ Historical Stock Returns } \\ \cline { 2 - 4 } Year & Market & Blandy & Gourmang The risk-free rate is 4% and the market risk premium is 5%.

M. Show how to estimate beta using regression analysis.

N. (1) Suppose the risk-free rate goes up to 7%. What effect would higher interest rates have on the SML and on the returns required on high-risk and low-risk securities? (2) Suppose instead that investors risk aversion increased enough to cause the market risk premium to increase to 8%. (Assume the risk-free rate remains constant.) What effect would this have on the SML and on returns of high- and low-risk securities?

O. Your client decides to invest $1.4 million in Blandy stock and $0.6 million in Gourmange stock. What are the weights for this portfolio? What is the portfolios beta? What is the required return for this portfolio?

Looks like the two graphs needed answer the questions did not come out. If possible please type the question above on chegg and the two graphs should appear for this question. I only need the answers to these 3 questions with work shown.

Thank you