Need full answers

4. Yolando Daoust owns a family of mutual funds. She has created two index funds which she is now marketing. She did this by first dividing all of the risky securities in the market into two classes: Value and Growth. Each security was assigned to only one class. She then formed two portfolios using securities from these two classes. In the first portfolio are all of the Value securities and in the second are all of the Growth securities. In each portfolio the securities are weighted according to their market weights. To understand what this means, assume that there were only four securities, A, B, C and D. A and B are Value, and C and D are Growth. A is 20% of the market, B is 40% of the market, C is 10% of the market and D is 30% of the market. Then the Value portfolio puts weight 1/3 on A and 2/3 on B. The Growth portfolio puts weight 1/4 on C and 3/4 on D. Note that these values are used only to illustrate what it means for Yolando to construct the two portfolios according to their value weights. The actual Value and Growth portfolios contain many more securities than these four. Now the standard deviation of the return on the Value portfolio is 0.2 and the standard deviation of the return on the Growth portfolio is 0.4. The correlation of the Value portfolio's return with the return on the market portfolio is 0.25 and the correlation of the return of the Growth portfolio with the return on the market is 0.875. Assume that the standard deviation of the market portfolio is 0.20 and that all securities are priced according to the Capital Asset Pricing Model. Now you are trying to create a mean variance efficient portfolio by taking positions in Yolando's Value portfolio and Yolando's Growth portfolio as well as risk free borrowing and lending. In other words, you are trying to get the highest possible expected return by investing only in Yolando's two portfolios and either borrowing or lending at the riskless rate. For every dollar invested in Value portfolio, what dollar amount should be invested in the Growth portfolio? 4. Yolando Daoust owns a family of mutual funds. She has created two index funds which she is now marketing. She did this by first dividing all of the risky securities in the market into two classes: Value and Growth. Each security was assigned to only one class. She then formed two portfolios using securities from these two classes. In the first portfolio are all of the Value securities and in the second are all of the Growth securities. In each portfolio the securities are weighted according to their market weights. To understand what this means, assume that there were only four securities, A, B, C and D. A and B are Value, and C and D are Growth. A is 20% of the market, B is 40% of the market, C is 10% of the market and D is 30% of the market. Then the Value portfolio puts weight 1/3 on A and 2/3 on B. The Growth portfolio puts weight 1/4 on C and 3/4 on D. Note that these values are used only to illustrate what it means for Yolando to construct the two portfolios according to their value weights. The actual Value and Growth portfolios contain many more securities than these four. Now the standard deviation of the return on the Value portfolio is 0.2 and the standard deviation of the return on the Growth portfolio is 0.4. The correlation of the Value portfolio's return with the return on the market portfolio is 0.25 and the correlation of the return of the Growth portfolio with the return on the market is 0.875. Assume that the standard deviation of the market portfolio is 0.20 and that all securities are priced according to the Capital Asset Pricing Model. Now you are trying to create a mean variance efficient portfolio by taking positions in Yolando's Value portfolio and Yolando's Growth portfolio as well as risk free borrowing and lending. In other words, you are trying to get the highest possible expected return by investing only in Yolando's two portfolios and either borrowing or lending at the riskless rate. For every dollar invested in Value portfolio, what dollar amount should be invested in the Growth portfolio