Question
Mr. X invested in a portfolio of risk-free asset and a risky portfolio. Mr. X's complete portfolio consists of 40% investment in risk-free asset and
Mr. X invested in a portfolio of risk-free asset and a risky portfolio. Mr. X's complete portfolio consists of 40% investment in risk-free asset and 60% investment in risky portfolio. Mr. Y invests 100% in the same risky portfolio. Expected return on Mr. Y's risky portfolio is 15%. Assume both Mr. X and Mr. Y are on the same Capital Allocation Line (CAL). If the risk-free rate is 5%, what is the expected return on Mr. X's complete portfolio?
can i get help with this and could you show calculation steps
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
