(ii) Consider a portfolio, D, made up by borrowing $1.00 at the risk free rate and investing it with $1.00 Of your own money in portfolio C. How sensitive will this portfolio be to each of the factors? (iii) What combination of securities ABC, PQR and the riskless security will move on a one-to-one basis with factor 1 and be insensitive to factor 2? (iv) You have discovered another portfolio P with the following characteristics: E[r,] P 1 0 0.8 Design an arbitrage to earn your $1M (reference part (iii) above)