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Now, suppose James would form a portfolio between the T-bills and his own two-stock portfolio (as in question 1). The expected return on such a
Now, suppose James would form a portfolio between the T-bills and his own two-stock portfolio (as in question 1). The expected return on such a portfolio is 15.8%. What is the proportion of his investments in each asset?
Expected return (%) Standard Deviation (%) Weight
Microsoft 28 42 0.4
Coca-Cola 12.5 21 0.6
The correlation between the two stocks is 0.5.
He would invest ____% into the T-bills, ____% into Microsoft, and ____% into Coca-Cola.
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