1. A managed portfolio has a standard deviation equal to 17% and a beta of 0.90 when the market portfolio's standard deviation is 28%. The adjusted portfolio P* needed to calculate the M² measure will have ________ invested in the managed portfolio and the rest in T-bills.

2. Portfolio managers Martin and Krueger each manage $2.2 million funds. Martin has perfect foresight, and the call option value of his perfect foresight is $330,000. Krueger is an imperfect forecaster and correctly predicts 46% of all bull markets and 58% of all bear markets. The value of Krueger's imperfect forecasting ability is

3. Douglass, an imperfect forecaster, correctly predicts 55% of all bull markets and 64% of all bear markets. Simmonds is a perfect forecaster. If Douglass is able to charge a fee of $22,800, the fee that Roy Simmonds should charge is __________. Assume that both forecasters manage similar-size funds.

4. Assume you purchased a rental property for $90,000 and sold it 1 year later for $95,000 (there was no mortgage on the property). At the time of the sale, you paid $2,700 in commissions and $900 in taxes. If you received $9,850 in rental income (all received at the end of the year), what annual rate of return did you earn?

5. A portfolio generates an annual return of 10.5%, a beta of 0.7, and a standard deviation of 12.0%. The market index return is 13.5% and has a standard deviation of 21.0%. What is the M² measure of the portfolio if the risk-free rate is 2%