1. You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 8% and a standard deviation of 10% and a Treasury bill with a rate of return of 3%. What percentage of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 4%? 2. There are (only) two risky portfolios on the Efficient Frontier. One is called X, and the other is called Y. For a given risk-free return, there are two Capital Allocation Lines associated with these two risky portfolios. The equations for these two Capital Allocation Lines are (C denotes the complete portfolio): Risky Portfolio X: E(rc) = = .05 +.2600 Risky Portfolio Y: E(rc) = .05 +.180C Given this information, which risky portfolio is the optimal risky portfolio? 3. You immediately short-sell 450 shares of Acme Corporation, now selling for $125 per share. If you want to limit your loss to at most $9,000, what is the maximum price the shares can reach before you short cover (close out your open short position)? 1. You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 8% and a standard deviation of 10% and a Treasury bill with a rate of return of 3%. What percentage of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 4%? 2. There are (only) two risky portfolios on the Efficient Frontier. One is called X, and the other is called Y. For a given risk-free return, there are two Capital Allocation Lines associated with these two risky portfolios. The equations for these two Capital Allocation Lines are (C denotes the complete portfolio): Risky Portfolio X: E(rc) = = .05 +.2600 Risky Portfolio Y: E(rc) = .05 +.180C Given this information, which risky portfolio is the optimal risky portfolio? 3. You immediately short-sell 450 shares of Acme Corporation, now selling for $125 per share. If you want to limit your loss to at most $9,000, what is the maximum price the shares can reach before you short cover (close out your open short position)