A B C D E G H Consider the following risky portfolios 1 A B C 2 D E F G H Expected return (%) 10 3 12.5 15 16 17 18 18 20 Standard deviation (%) 23 4 21 25 29 29 32 35 45 5 a. 6 Plot these portfolios on a graph where the x axis is the standard deviation and the y axis is the return. 7 b. Five of the portfolios are efficient, and three are not. Which are the inefficient ones? Explain. c. Suppose you are prepared to tolerate a standard deviation of 25 percent on your portfolio. g What is the maximum expected return that you achieve if you cannot borrow or lend? d. What is your optimal strategy if banks offer a rate of 12% on borrowing and lending and you are prepared to tolerate a standard deviation of 25 percent. What is the maximum expected return that you can achieve? (Hint: o think CML using one of the efficient portfolios)