Assume throughout that portfolio M is THE efficient portfolio that lies on the CML while portfolio Z and X are not efficient. Use the following information to answer the questions below: E(RM) = ____ Covz,x = 0.0104 X = 1.12 E(RZ) = 18% Rf = 2.25% Z = 32% M = 22% CovZ,M = 0.0563 CovM,M = ____ X = 25% E(Rx) = 17.42%

Portfolio B contains 35% borrowed at the risk-free rate and all funds invested in Portfolio A. According to Markowitz: a) The expected return on Portfolio B, E(RPB) = % b) The total risk of Portfolio B, SDPB = % According to Sharpe: c) The systematic risk of Portfolio B, PB = % d) The expected return on Portfolio B,E(RPB) = % Portfolio C contains 75% of Portfolio B and 25% in the risk-free asset. According to Sharpe: e) The Beta of Portfolio C, BPc = . f) The expected return on Portfolio C, E(RPc) = .