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You are considering investing $2,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% and a risky portfolio, P.
You are considering investing $2,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% and a risky portfolio, P. constructed with two risky securities, X and Y. The optimal weights of X and Y in Pare 60% and 40% respectively. X has an expected rate of return of 16%, and Y has an expected rate of return of 11%. To form a complete portfolio with an expected rate of return of 7%, 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, 421 Multiple Choice OK: 60% 40% SOX. 30% 20% 30% 12% You have the following rates of return for a risky portfolio for several recent years. Assume that the stock pays no dividends. Year 2014 2015 2016 2017 Beginning of Year Price $90 $95 $91 $94 # of Shares Bought or sold 230 bought 180 bought 205 sold 205 sold What is the geometric average return for the period? Multiple Choice 2.93%
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