Question: Exercise 2 . Suppose you have a riskless security at 6 % and a market portfolio with a return of 1 8 % and a

Exercise 2.
Suppose you have a riskless security at 6% and a market portfolio with a return of 18% and a
standard deviation of 10%.
How should you go about investing your money so that your investment will have a risk level of
15%?
Using the Capital Market Line (CML),
a. Calculate the portfolio return.
b. How much to invest in the riskless security?
c. What will be the investor's investment strategy?
Exercise 2. Suppose you have a riskless security at 6% and

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