Portfolios B D 0% 35% 45% 0% 0 5 15 0 0 10 15 10 6.5 6.5 80 20 0 30 0 10 5 20 Exhibit 7. BigBang Model Portfolios Total Asset Class Return Yield US large-cap 13.00% 3.00% stocks US small-cap 15 1 stocks Non-US stocks 14 1.5 US corporate bonds (AA) US Treasury 6 6 notes Non-US government 6.5 bonds Municipal 4 4 bonds (AA) Venture capital 20 US Treasury 4 4 bills Total After-tax expected return Sharpe ratio After-tax yield 6.5 0 5 5 0 0 10 0 10 0 0 0 10 25 20 5 5 5 100% 100% 100% 100% 4.20% 7.50% 13.00% 6,40% 0.35 0.5 2.90% 0.45 1.90% 0.45 3.30% 4.20% * Tar exempt. Expected inflation is 3.0% A. Prepare and justify an alternative investment policy statement for the Smiths' Family Portfolio. (Risk, Return, Liquidity, Legal, Tax, Time Horizon, Unique circumstances) B. Recommend a portfolio from Exhibit 7 for the Family Portfolio. Justify your recommendation with specific reference to: i. three portfolio characteristics in Exhibit 7 other than expected return or yield; and ii. the Smiths' return objectives. Show your calculations if necessary