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Mr. Carlo Monte is young and comfortable with risk. He brings US$1 million to USB for Miss Ecclestone to invest. Based on his profile, she
Mr. Carlo Monte is young and comfortable with risk. He brings US$1 million to USB for Miss Ecclestone to invest. Based on his profile, she invests $200,000 in T bills and $800,000 in a new risky portfolio called P2 (65% equities and 35% bonds). Suddenly, Mr. Monte gets spooked by the volatility in the markets, so he asks Miss Ecclestone to reduce his holdings of P2 to 60%. Based on this information we know that Mr. Monte's new allocation to bonds and equites are: O a. $210,000 and $390,000 b. $280,000 and $580,000 c. $390,000 and $210,000 d. $350,000 and $650,000
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