You are evaluating various investment opportunities currently available and have calculated expected returns and standard deviation for five different well-diversified portfolios of risky assets:

Portfolio	Expected Return	Standard Deviation
Q	7.8%	10.5
R	10.0%	14.0
S	4.6%	5.0
T	11.7%	18.5
U	6.2%	7.5

a) For each portfolio, calculate the risk premium per unit of risk that you expect to receive. Assume that the risk-free rate is 3%.

b) Using your computations in part (a), explain which of these five portfolios is most likely to be the market portfolio.

c) Use your calculations to draw the CML from (b) above.

d) If you are willing to make an investment with = 7.0%, is it possible to earn a return of 7.0%?

e) What is the minimum level of risk that would be necessary to earn 7.0%? What is the composition of the portfolio along the CML that will generate that expected return?

f) Suppose that you are now willing to make an investment with = 18.2%. What would be the composition of this portfolio? What is the expected return of the portfolio?