You are considering an investment GDL, Inc. GDL has a Beta = 0.70. The goddess tells you that GDL will have a return of 12% over the next year, and she also reveals that rm = 16% and rf = 6%.

a) In the space below, form a portfolio using the market asset and the risk-free asset that has the same expected return as GDL. Explain why portfolio would be a better investment than GDL.

b) In the space below, form a portfolio using the market asset and the risk-free asset that has the same risk as GDL. Explain why the portfolio would be a better investment than GDL.