Suppose that the S&P 500 index has mean of E(rM ) = 0.16 and standard deviation of (rM ) = 0.10. The risk-free rate is rf = 0.08.

1. (10pts) What is the expected return and standard deviation of a portfolio that is totally invested in the risk-free rate

2. (10pts) What is the expected return and standard deviation of a portfolio that has weight = 0.5 on the risk-free rate and 1 = 0.5 in the S&P 500 index?

3. (10pts) What are the weights on a portfolio, for investing in the risk-free rate and 1 for investing in the S&P 500 index, that produce a standard deviation that is 0.04? What is the expected return on that portfolio?

Suppose that the S\&P 500 index has mean of E(rM)=0.16 and standard deviation of (rM)=0.10. The risk-free rate is rf=0.08. 1. (10pts) What is the expected return and standard deviation of a portfolio that is totally invested in the risk-free rate 2. (10pts) What is the expected return and standard deviation of a portfolio that has weight =0.5 on the risk-free rate and 1=0.5 in the S\&P 500 index? 3. (10pts) What are the weights on a portfolio, for investing in the risk-free rate and 1 for investing in the S\&P 500 index, that produce a standard deviation that is 0.04? What is the expected return on that portfolio