Details of the Bond Portfolio:

	Par Value	Maturity	Coupon	Cost Basis	FMV
10,000 US T-bills	10,000	1	0	9,640.00	9,643.20
20,000 US T-bonds	20,000	30	8%	20,000	22,494.47
10,000 US T-bonds	10,000	20	0	1,313	2,625.30
20,000 Super co. bonds	20,000	20	9%	20,000	24,271.01
15,000 Meager Bonds	15,000	25	9%	15,000	3000.47
25,000 TN Municipal	25,000	15	6%	25,000	27,616.29
Money Market Acct					10,349.26
TOTAL					100,000.00

Note: The Super co bonds are investment grade quality while the Meager Bonds are junk bonds

Details of the Brokerage Account

Stock	Shares	Beta	Std. Dev	Div Yield	Avg. Return	Cost	FMV
Mega co	1000	.88	12.5%	4.0%	12.5%	8,046.47	14,500
Tiny co	1000	1.24	18%	0	15%	10,724.35	12,333
Oil co	1000	1.00	10%	3.5%	8%	11,135.70	15,150
Auto co	1000	1.12	10%	3.0%	10%	12,124.72	16,138
TOTAL							58,121

Note: The stock portfolio has a correlation coefficient with the market of .80

a. If Troy and Selma wanted to decrease the overall risk level of their portfolio which security might you consider selling (and think about why)?

b. Given the provided information, what is the pre-tax equivalent yield to maturity for the TN Municipal bonds?