ou are evaluating various investment opportunities currently available and you have calculated expected returns and standard deviations for five different wellversified portfolios of risky assets: a. For each portfolio, calculate the risk premium per unit of risk that you expect to receive ([E(R)=RFR]/). Assume that the risk-free rate is 4.0 percent. Round your answers to four decimal places. Q: R: S: Tr: U: b. Using your computations in Part (a), explain which of these five portfolios is most likely to be the market portfolio. Round your answer to four decimal places. Portfolio, has the -5elect. 0 ratio of rigk premium per unit of risk, of these five portfolios so it is most likely the market portfolio. Choose the correct CML. graph. The correct graph is The correct graph is -seiect- 0 . A. Capital market Line B. Capital market Line Eypected Rate of Retum - Chapter 06: Assignment - An Introduction to Portfolio Management c. Capital market Line D. Capital market Line Eipected Rate of Return- Chapter 06: Assignment - An Introduction to Portfolio Management c. If you are only willing to make an investment with =7.5%, is it possible for you to earn a retum of 7.5 percent? Do not round intermediate calculations. Round your answer to one decimal place. Expected portfolio return: % it possible to earn an expected return of 7.5% with a portfolio whose standard deviation is 7.5%. d. What is the minimum level of risk that would be necessary for an investment to earn 7.5 percent? Do not round intermediate calculations. Round your answer to one decimal place. c. If you are only willing to make an investment with =7.5%, is it possible for you to eam a retum of 7.5 percent? Do not round intermediate calculations. Round your answer to one decimal blace. Expected portfolio return: It possible to earn an expected return of 7.5% with a portfolio whose standard deviation is 7.5%. d. What is the minimum level of risk that would be necessary for an investment to earn 7,5 percent? Do not round intermediate calculations. Round your answer to one decimal place. % What is the composition of the portfolio along the CML that will generate that expected return? Round your answers to four decimal places. WMT: Wrik-free asset: e. Suppose you are now willing to make an investment with =18.9%. What would be the investment proportions in the riskless asset and the market. portfolio for this portfolio? Use a minus sign to enter negative values, if any. Round your answers to four decimal places. Wher: Writik-tree asset: What is the expected return for this portfolio? Round your answer to one decimal place
