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

question 26

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%. $\begin{array}{llll}&A&B&C\\\text { a. } & 0.068 & 0.027 & 0.072 \\\text { b. } & 0.414 & 0.276 & 0.389 \\\text { c. } & 0.700 & 0.680 & 0.605 \\\text { d. } & 0.300 & 0.280 & 0.205 \\\text { e. } & 0.650 & 0.580 & 0.480\end{array}$

---

Definitions:

Environmental Degradation

The deterioration of the environment through the depletion of resources, the destruction of ecosystems, and the extinction of wildlife.

Population Growth

The increase in the number of individuals in a population, often measured as the change in population size over time.

Resource Consumption

Resource consumption refers to the use of natural resources by humans for energy, food, materials, and other necessities.

Density-Dependent

Factors whose effects on the size or growth of a population vary with the population density.