QUESTION 7 A portfolio with a 25% standard deviation generated a return of 15% last year when T-bills were paying 4.5%. This portfolio had a Sharpe ratio of A. 22 OD. 25 QUESTION 8 Consider a Treasury bill with a rate of return of 5% and the following risky securities: Security A: E(I) = 15, variance = .0400 Security B: E() = 10; variance = .0225 Security C: E(I) = 12; variance = 1000 Security D: E(T) = .13, variance = 0625 The investor must develop a complete portfolio by combining the risk-free asset with one of the securities mentioned above. The security the investor should choose as part of her complete portfolio to achieve the best CAL would be A security A B. security B C. security C D. security D