Question 1. Suppose that investor A holds a portfolio (portfolio A) consisting of five shares. The portfolio return is equal to 10%, while its risk (st.dev) equals 12%. The market portfolio (consisting of n shares) at this time of reference rewards investors with 15% and its risk equals 10%. The risk free interest rate is 2%. Is this portfolio (portfolio A) an efficient one? What is the diversification benefit of another investor (investor B) who holds a perfectly diversified portfolio (portfolio B) which rewards investors with the same return as portfolio A does? How can this portfolio (portfolio B) be constructed? How does the existence of the risk free interest rate affect the optimum portfolio construction? Explain in detail. [50%)