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Question 24 O out of 15 points Problem 4 (15 points): You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed
Question 24 O out of 15 points Problem 4 (15 points): 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 (which is 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%. a. To form a complete portfolio with an expected rate of return of 11%, you should invest % of your complete portfolio in treasury bills. b. 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 % and % of your complete portfolio in security X and Y respectively. c. If you decide to hold 30% of your complete portfolio in the risky portfolio and 70% in the treasury bills then the dollar values of your positions in X and Y respectively would be $ and Selected Answer: [None Given] Thursday, November 19, 2020 7:49:24 AM CST
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