1. If Mary decided to invest her money equally in high-tech and counter-cyclical stock, what would her portfolio’s expected return and risk level be? Are these expectations realistic?
2. What would happen if Mary were to put 70% of her portfolio in the High-Tech and 30% in the index fund? Would this combination be better for her? Explain.
3. Based on these calculations what would you think Bill should propose as a possible portfolio combination for Mary?