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show me the steps please not in exel 4/You invest $100 in a risky asset with an expected rate of return of 0.12 and a
show me the steps please
4/You invest $100 in a risky asset with an expected rate of return of 0.12 and a standard deviation of 0.15 and a T-bill with a rate of return of 0.05. What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0.09? A) 85% and 15% B) 75% and 25% C) 67% and 33% D) 57% and 43% E) Cannot be determined. I Answer: D 9%=w 1(12%) +(1- w 1 )(5%); 9% = 12%w 1 + 5%-5%w 1 ; 4% = 7%w 1 ; w 1 = 0.57; 1- w 1 = 0.43; 0.57(12%) + 0.43(5%) = 8.99% not in exel
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