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Consider an economy composed of two risky assets, Asset 1 and Asset 2, and a riskfree asset. The market capitalization of Asset 1 is $3M
Consider an economy composed of two risky assets, Asset 1 and Asset 2, and a riskfree asset. The market capitalization of Asset 1 is $3M and the market capitalization of Asset 2 is $6M. All investors in the economy invest their risky asset allocation in the tangency portfolio. Which fraction of their risky asset allocation do investors invest in Asset 1? 11/7/2019 I) 0.50 II) 0.33 III) 0.66 IV 0.40
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