Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help me solve these questions. You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay
Please help me solve these questions.
You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 5% and a risky portfolio, P, constructed with 2 risky securities X and Y. The optimal weights of X and Y in P are 60% and 40% respectively. X has an expected rate of return of 14% and Y has an expected rate of return of 10%. 62. To form a complete portfolio with an expected rate of return of 11%, you should invest of your complete portfolio in treasury bills A. 19% B. 25% C. 36% D. 50% 63. To form a complete portfolio with an expected rate of return of 8%, you should invest approximately in the risky portfolio. This will mean you will also invest approximately of your complete portfolio in security X and Y respectively and A. 0%, 60%, 40% B. 25%, 45%, 30% C. 40%, 24%, 16% D. 50%, 30%, 20%Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started