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i need to know #4 Done Reader View Available 4. (Continuation of problem 3) a. If no shift has occurred in the capital market line,
i need to know #4 Done Reader View Available 4. (Continuation of problem 3) a. If no shift has occurred in the capital market line, what rate of return would be expected from the portfolio held by MBU on December 31? b. If MBU wished to modify the composition of its December 31 portfolio so that the expected rate of return was the same as that of its January 1 portfolio, what transactions would be necessary? 5. (Continuation of problem 3) a. By how many standard deviations did the realized return on MBU's portfolio fall short of its expected return? b. If the distribution of rates of return can be approximated by a normal distribution, what is the probability of earnings as little as this or less? 6. Suppose that it were possible for a investor to borrow, at 8 percent per year, as much as $0.75 for every dollar of stock he owned free and clear. Could an investor having $100,000 in cash devise a portfolio consisting only of shares in the market portfolio, margin debt, and treasury bills for which the expected rate of return was 17 percent? If it is possible, describe the transactions that would be necessary; if not, explain why it is impossible. 7. A retired doctor wants to hold a portfolio consisting only of debt and stock in the market portfolio. She also wants the assurance that, even if the return on the market portfolio were two standard deviations below
i need to know #4
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