Imagine that your uncle Bob holds a portfolio that has a standard deviation of 45% and expected return of 15%. If he wants to keep his current level of total risk, what is a plausible increase in expected return that you could offer your uncle? O Increase his expected return by 4.20%. O Increase his expected return by 3.60%. O Increase his expected return by 1.60%. O Can NOT increase his expected return, because it is already efficient. The next five questions are interconnected. Assume that CAPM holds. You are given the following information about the riskless rate f, stock Z and the market portfolio, M: Elr) o Riskless Asset (f) 0.03 (3%) 0.00 Stock Z ? 0.35 Market Portfolio (M) 0.12 0.25 You are not given the expected return of stock Z. The correlation of the returns on stock Z and the market portfolio is eques to 0.50. Assume that stock Z is part of the market portfolio