Exhibit 85
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Short Answer

Exhibit 8.5
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c } \text { Portfolio } & \text { Expected Return } & \text { Standard Deviation } \\\hline \text { A } & 9.8 \% & 14.0 \% \\\text { B } & 6.7 \% & 9.8 \% \\\text { C } & 11.2 \% & 18.5 \%\end{array}$$
-Refer to Exhibit 8.5. Calculate the risk premium per unit of risk for the three portfolios above assuming the risk-free rate is 4.0%. $\begin{array}{llll}&A&B&C\\\text { a. } & 0.068 & 0.027 & 0.072 \\\text { b. } & 0.414 & 0.276 & 0.389 \\\text { c. } & 0.700 & 0.680 & 0.605 \\\text { d. } & 0.300 & 0.280 & 0.205 \\\text { e. } & 0.650 & 0.580 & 0.480\end{array}$