A firm that first insists that it invests a specific percentage of its portfolio in bonds, stock, and in treasury bills, rather than first trying to identify specific good stocks or bonds, is most likely practicing what type of portfolio construction? The stock section of this portfolio is made up of mostly Blamo stock. Blamo can behave in three different ways over the next year depending on the state of the world: State Good Okay Bad Return 15% 6% -4% Probability 30% 45% 25% What is the expected return of the stock? (online fill in 1) What is the variance of the stock? What is the Sharpe ratio of the stock if the risk-free rate is 5, 4, or 2%? If another company sells its own stock, Whamo stock, which is designed to always have a Sharpe ratio of 0.3, which stock Blamo or Whamo is preferred for the different risk-free rates and why? A friend of yours tells you that in Japan a specific Japanese treasury note matures for $1000 in two years can be bought or sold for $925. What is the annualized risk-free rate in this example? (online fill in 4) You happen to notice the same security can be purchased or sold domestically for $945, how do you arbitrage this position? How many times should you make this trade? How likely is it that your friend's information is current and correct