he market portfolio? 3. Assume you have all of your wealth (a million dollars) invested in the Vanguard 500 Index fund (a proxy for the market portfolio) and that you expect to earn an annual return of 12 percent, with a standard deviation of returns of 25 percent. You have become more risk-averse, and so you decide to shift $200,000 from the Vanguard 500 Index to Treasury bills. The Treasury bill rate is 4 percent. Estimate the expected return and standard deviation of your new portfolio. 4. Every investor in a CML-efficient portfolio holds the risk-free asset, or the market portfolio, or some combination of the risk-free asset and the market portfolio. Assume that the standard deviation of the market portfolio is 30% and that the expected return of the portfolio is 15%. What proportion of the following investor's wealth would you suggest investing in the market portfolio and what proportion in the riskless asset? The risk-free rate is 5% a. an investor who desires a portfolio with no standard deviation; b. an investor who desires a portfolio with a standard deviation of 15%; c. an investor who desires a portfolio with a standard deviation of 30%; d. an investor who desires a portfolio with a standard deviation of 45%; e. an investor who desires a portfolio with an expected return of 12%