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Suppose you are given the following sets of weights, where portfolios P1 and P2 are both efficient portfolios. Which portfolio, P1 or P2, is closest
Suppose you are given the following sets of weights, where portfolios P1 and P2 are both efficient portfolios. Which portfolio, P1 or P2, is closest to the tangency point of the line emanating from the riskless rate and the opportunity set of risky assets? Risk free rate=2%. Explain your logic.
| P1 weights (in %) | P2 weights (in %) | |
| US | 26 | 33 |
| UK | -49 | -63 |
| China | 46 | 59 |
| Canada | 17 | 23 |
| Riskless | 60 | 48 |
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