Question
please quickly 10 minute Use the following information to answer questions 7,8,9 and 10 Expected return of stock x E(Rx) = 5% Expected return on
please quickly 10 minute
Use the following information to answer questions 7,8,9 and 10 Expected return of stock x E(Rx) = 5% Expected return on stock y E(Ry) = 8% Risk of stock x = 8.5% Risk of stock y = 12% The correlation coefficient between the two stocks=0.2 If there exists a risk-free asset (rf) that earns a 4% annual return. Find the weights of stock x and y in the optimal risky portfolio.
1. if an investor with a risk aversion degree of 6 wants to invest in a complete portfolio. What proportion of investment should the investor invest in the optimal risky portfolio?
2. Find the risk, return and utility score of the investor's complete portfolio
3. Find the risk and return of the optimal risky portfolio
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