Given the following information, please

1. draw the capital allocation line;
2. estimate the return and risk if you invest 80% of the money into security P
3. estimate the return and risk if you invest 250% of the money into security P
4. some investors think the equity market punishes margin trading. Do you agree? (you may use 2) and 3) to answer this question.

	Interest rate	Risky security P
Return	Bid: 1% Ask: 2%	8%
Risk (Standard deviation)		11%