Calculate the average annual return for a $3,000 investment with an ending price of $5,500 four years later, with no intermediate cash flows.

c) Consider an investment with the following cash flows:

Year

Cash flows

2003

$20,000

2004

$40,000

2005

$25,000

2006

$35.000

What are the most the investor would invest so that the return on the investment is at least 10%?

d) Suppose the expected risk-free asset is 6% and the return on the market is 10%. Further, suppose you have a portfolio comprised of the following securities with equal investments in each:

(i) What is the expected return for each security in the portfolio?

(ii) What is the expected return on the portfolio?