Question 1 Please refer to the following Figure. ER CML Efficient Frontier R 0.01 0.04 You are a fund manager, and you have two combinations of investing in risk-free assets and the market portfolio M, that you offer clients. The market portfolio has an expected return of 12% and a standard deviation of 3%. The risk-free rate is 6%. Suppose you offer clients the choices mapped by A and B. Given your client demands a portfolio in which you long the risk-free asset, what is the expected return on the portfolio they choose? (a) E[R,1-2% (b) E[R]-5% (c) E[R]-8% (d) E[R]=11% (e) E[Rpl-14%