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please show work and original formulas if any. The answer is 55.556% but I dont know how to get it. Question 4 (13 Points) You
please show work and original formulas if any.
Question 4 (13 Points) You have just landed a job in the trust department of a large bank. Your first assignment is to invest $1,000,000 from an estate for which the bank is trustee. The Trust Agreement restricts the trust to T-Bills, SPDRs (an S&P index fund), Bad Wolf Inc and Internect Widgets. The Bank's Econmics and Forecasting Department have supplied you with the following information. Investment E[Return) Standard Beta CAPM: E(R) (Observed D eviation T-Bills 0.0% SPORS 6.3% 12.0% Bad Wolf Inc 6.0% 19.0% Internet Widgets 4.5% 16.0% 0.60 0.4% (7) (3 points) If we hold a portfolio with only Bad Wolf Inc. stocks and Internet Widgets stocks and the portfolio Beta is 1.1, how much Bad Wolf Inc. stocks do we have (i.e. what is the Bad Wolf Inc.'s weight in the portfolio) The answer is 55.556% but I dont know how to get it.
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