Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years

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Consider historical data showing that the average annual rate of
return on the S&P 500 portfolio over the past 85 years has
averaged roughly 8% more than the Treasury bill return and that the
S&P 500 standard deviation has been about 20% per year. Assume
these values are representative of investors’ expectations for
future performance and that the current T-bill rate is 5%.
WBills
WIndex
0.0
1.0
0.2
0.8
0.4
0.6
0.6
0.4
0.8
0.2
1.0
0.0