Suppose that you purchase $6,000 of security A and$18,000 of security B, and borrow $4,000 of fund C. These transactions constitute your entire portfolio.

Determine the portfolio weights for each component of the portfolio. (Keep 2 decimal places to your answers.)

w_A: ; w_B: ; w_C:

Assume that borrowing takes place at a risk-free interest rate of 5%. The following additional information is given:

	A	B
Var(r)	0.36	0.25
E(r)	0.20	0.16

together with the correlation coefficient of A and B being 0.80. Compute the variance and expected rate of return of the portfolio. (Keep 4 decimal places to your answers.)

Expected rate of return: Variance:

Determine how much money you can expect to receive at the end of the year with the investment. (Keep 2 decimal places to your answers.)

Amount expected to receive: $

only A and B are given