1.Suppose you managed a $1 million investment fund that borrows $500,000 at 5% to leverage the fund's investment in the above portfolio (i.e., w_p = 1.5).

a.What would be the dollar return from the leveraged investment if the portfolio earns its expected return of 20%?

b.What would be the rate of return of the fund from the leveraged investment if the portfolio earns its expected return of 20%?

c.What would be the fund's dollar return and rate of return from the leveraged investment if the rate of return on the portfolio were one standard normal deviation above its expected return (z = 1)?

d.What would be the fund's dollar return and rate of return from the leveraged investment if the rate of return on the portfolio were one standard normal deviation below its expected return (z = 1)?