Q. Mr. Miles is a first time investor and wants to build a portfolio using only U.S. T-bills and an index fund that closely tracks the S&P 500 Index. The T-bills have a return of 5%. The S&P 500 has a standard deviation of 20% and an expected return of 15%.

1. Draw the CML and mark the points where the investment in the market is 0%, 25%, 75%, and 100%.

2. Mr. Miles is also interested in determining the exact risk and return at each point