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If you want to have a return for your Final Portfolio (that is invested between Optimal Risky portfolio and Risk Free Security) of 1.10%, what
If you want to have a return for your Final Portfolio (that is invested between Optimal Risky portfolio and Risk Free Security) of 1.10%, what would be your allocation between Optimal 2-stock risky portfolio and risk free security? (Refer to the table above.)
Please show all work
1.10 = A x 1.34 + (1-a).5
I know the formula is set up like this. 1.10 = 1.34a + .5 -.5a
Where does the other .5 come from ?
The table is at the bottom thanks
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