Gilligan and his friends have just been rescued from living on an island the past 5 years. In the days before the rescue, Gilligan found a treasure chest valued at 31 million, before his tax liability. The treasure has been liquidated and Gillian has come to you for financial advise. While living on the island, Gilligan ruined nay rescue attempts because of his stupidity and geels very bad about it. He wants to make amends by offering gifts to the other survivors. He has offered to pay for acting and signing lessons for Ginger, at a cost of 1 million. He will pay for a new boat for the skipper valued at 4 million. He will purchase a farm for Mary Ann in Nebraska for 1 million. He will support scientific research by donating 2.5 million to the Professors research foundation. Finally, he will give Mr. and Mrs. Howell each 1 million. Each of these will occur within the next 3 months. Gilligan believes he needs annual before tax income of 562,000 to cover his living expenses. He intends to donate 38,000 every year to the US Coast Guard. He expects to purchase a home in Beverly Hills for 2 million and a car for 100,000 in the next 6 months. Gilligan pays a 28% tax rate and inflation should be 2.2% Mr. and Mrs. Howell have a grandson who is three years old and Gilligan agrees to pay his annual private violin lessons for the next ten years. The lessons charge a monthly fee of 5,000. Upon his death, Gilligan wants to leave a substantial amount to Mrs. Howells favorite charity. Gilligan is in good health, has no health or life insurance, and has becoe very popular among the Hollywood crowd. **PLEASE ANSWER ALL QUESTIONS AND SHOW ALL WORK**

3) Explain how you would determine Gilligans overall risk tolerance

4) The skipper is super happy with his new boat but feels guilty because he brought back an ancient artifact that he sold for 5 million after tax without the knowledge of crew. The skipper uses the service of Boris Wealth Management. Boris has invested the skippers wealth equally into 20 different stocks that have an average correlation coefficient of 0.20. explain the way the harry Markowitz efficient frontier fits into the skipper portfolio and discuss the way the capital market line would help the skippers risk return relationship