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Questions 1-7 refer to the following graph of risk vs. return for a basket of possible portfolios, where each lettered point represents a different portfolio.

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Questions 1-7 refer to the following graph of risk vs. return for a basket of possible portfolios, where each lettered point represents a different portfolio. The shaded area represents all possible stock portfolios. Expected return D. 11.0% - - 3.2% 0% Risk 1. Which portfolio is infeasible? A. C B. E C. G D, all of the above are feasible 2. Which portfolio has the highest return? A. A B. B c, c D. D 3, which portfolio represents 100% alocation into US Treasuries? A. B B. C C. E D. G 4. If the risk free rate is 3.2%, which is the optimal stock portfolio? A. A B. B c, c D. E 5, if the risk free rate is 32%, what is the market risk premium? A, 11.0% B, 7.8% C. 6.4% D, 6.0%

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