Use the following information for the next five questions. Assume you have a two risky asset world and the assets have a correlation of 1. Asset A has an expected return of 10% and a standard deviation of 10%. Asset B has an expected return of 20% and a standard deviation of 20%. On a graph with expected return on the y-axis and standard deviation on the x-axis, show the portfolio opportunity set from combining the two assets into a portfolio. Question 7 (5 points) Combine 50% of Asset A with 50% of Asset B and call it Portfolio C. What is the expected return and standard deviation of portfolio C? Answer the expected return in the first blank and the standard deviation in the second blank. Use a percentage sign and round to the nearest whole percent, e.g. 20% A/ Question 8 (5 points) Assume you combine 50% of Portfolio C in the previous question with 50% of the riskfree asset paying 5%. Show that portfolio on a graph and label it Portfolio D. What is the expected return and standard deviation of Portfolio D? Use a percentage sign and round your answers to one decimal place, e.g., 6.0%. A/ A/ Is Portfolio D that you formed in the previous question efficient? Just answer yes or no. If it is not efficient, show an efficient portfolio on your graph that is clearly superior to it. Comment on the desirability of holding Asset A in the three asset (Asset A, Asset B and the riskfree asset) world we have created, i.e., what sort of investor would want to hold Asset A in his/her portfolio