You are evaluating various investment opportunities currently available and you have calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets: Portfolio Expected Return Standard Deviation Q 8.7% 11.5% R 10.8 13.0 s 5.8 5.6 T 12.8 18.5 U 6.7 8.5 a. For each portfolio, calculate the risk premium per unit of risk that you expect to receive ([E(R) - RFR]/o). Assume that the risk-free rate is 4.0 percent. Round your answers to four decimal places. Q: R: S: T: U: b. Using your computations in Part (a), explain which of these five portfolios is most likely to be the market portfolio, Round your answer to four decimal places. Portfolio -Select- has the -Select-ratio of risk premium per unit of risk, of these five portfolios so it is most likely the market portfolio. Choose the correct CML graph. The correct graph is -Select- A. Capital market Line Expected Rate of Return 0.15+ 0.1 0.05 RFR -0.08-0.06-0.04 -0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Expected Risk B Capital market Line Expected Rate of Return 0.15 0.1 R 0.05 RFR -0.08-0.06-0.04 -0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Expected Risk c. Capital market Line Expected Rate of Return 0.15 0.1 U 0.05 RFR -0.08-0.06-0.04-0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Expected Risk D. Capital market Line Expected Rate of Return 0.15 0.1 R RFR 0.05 -0.08-0.06-0.04 -0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Expected Risk -0.08-0.06-0.04-0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Expected Risk C. If you are only willing to make an investment with a = 6.0%, is it possible for you to earn a return of 6.0 percent? Do not round intermediate calculations. Round answer to one decimal place. Expected portfolio return; % It -Select- possible to earn an expected return of 6.0% with a portfolio whose standard deviation is 6.0%. d. What is the minimum level of risk that would be necessary for an investment to earn 6.0 percent? Do not round Intermediate calculations. Round your answer to decimal place. % What is the composition of the portfolio along the CML that will generate that expected return? Round your answers to four decimal places. WMKT: Wrisk-free asset: e. Suppose you are now willing to make an investment with o = 18.3%. What would be the investment proportions in the riskless asset and the market portfolio for portfolio? Use a minus sign to enter negative values, if any. Round your answers to four decimal places. WMKT: Wrisk-free asset What is the expected return for this portfolio? Round your answer to one decimal place. %