8.Suppose there are four securities:BB stock,REM stock,ACX stock,and a risk-free asset.The total market values of each at current prices are $50 million of BB stock,$40 million of REM stock,$80 million of ACX stock,and $30 million of the risk-free asset.Determine the holdings of the three risky assets of a trader who invests $60,000 of a $300,000 portfolio in the riskless security. (a)$70,000 in BB stock,$50,000 in REM stock,$120,000 in ACX stock (b)$60,000 in BB stock,$48,000 in REM stock,$96,00 in ACX stock (c)$70,588 in BB stock,$56,471 in REM stock,$112,941 in ACX stock (d)$88,235 in BB stock,$70,588 in REM stock,$141,176 in ACX stock Answer:(c) 9.In the CAPM,the trade-off line is called the (a)capital market line (b)portfolio market line (c)asset market line (d)capital asset line Answer:(a) 10.The correct equation for the Capital Market Line(CML)is a@E()+y=o4 (b)E(r)=+ E- OM (c)E(r)= E(r)- OM (d)E(r)=r+m Answer:(b) 13-313-3 8. Suppose there are four securities: BB stock, REM stock, ACX stock, and a risk-free asset. The total market values of each at current prices are $50 million of BB stock, $40 million of REM stock, $80 million of ACX stock, and $30 million of the risk-free asset. Determine the holdings of the three risky assets of a trader who invests $60,000 of a $300,000 portfolio in the riskless security. (a) $70,000 in BB stock, $50,000 in REM stock, $120,000 in ACX stock (b) $60,000 in BB stock, $48,000 in REM stock, $96,00 in ACX stock (c) $70,588 in BB stock, $56,471 in REM stock, $112,941 in ACX stock (d) $88,235 in BB stock, $70,588 in REM stock, $141,176 in ACX stock Answer: (c) 9. In the CAPM, the trade-off line is called the ________. (a) capital market line (b) portfolio market line (c) asset market line (d) capital asset line Answer: (a) 10. The correct equation for the Capital Market Line (CML) is ________. (a)   M E r rf     (b)    M f  f M E r r E r r              (c)    M f  M E r r E r    (d) E r r  M f M    Answer: (b)