QUESTION 15

1. 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 two 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%. The dollar values of your positions in X, Y, and Treasury bills would be _________, __________, and __________, respectively, if you decide to hold a complete portfolio that has an expected return of 12%.

   		$570; $380; $50
   		$243; $162; $595
   		$595; $162; $243
   		$595; $243; $162

QUESTION 16

1. Which of the following is best described as nondiversifiable/market risk?

   		Biogens Alzheimer drug failed trial.
   		Teslas chief engineer leaves the company.
   		Peloton recalls its treadmills due to safety concern.
   		world war