QUESTION 9 Consider a Treasury bill with a rate of return of 6.5% and the following risky securities: Variance % Expected return % 0.5 38 22 7 19 2.8 11 0.98 The two securities the investor should discard as part of her portfolio to achieve the best CML would be securities: O XXXYYY Security www XXX YYY ZZZ WWW.ZZZ www.XXXXX XXX, ZZZ WWW.YYY

Consider a Treasury bill with a rate of retum of 6.5% and the following risky securities: The two securities the investor should discard as part of her portfolio to achieve the best CML would be securities: x00cm wiw, zm x0022 wnw m