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Changing risk level. Ms. Chambers wants to change the expected return of her portfolio. Currently, she has all her money in U.S. Treasury bills with
Changing risk level. Ms. Chambers wants to change the expected return of her portfolio. Currently, she has all her money in U.S. Treasury bills with a return of 2.25%. She can switch some of her money into a risky portfolio with an expected return of 14%. What percentage of her wealth will she need to invest in the risky portfolio to get an expected return of 4%? Of 6%? Of 8%? Of 10%? Of 12%? Of 14%? Is there a pattern here? If she wants an expected return of 4%, then she should have decimal places.) % of her wealth in the risky portfolio and % in the risk-free asset. (Round both answers to two
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