Question
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
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, constructed with two 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%. The dollar values of your positions in X, Y, and Treasury bills would be _________, __________, and __________, respectively, if you decide to hold a complete portfolio that has an expected return of 8%.
the steps my teacher showed us:
I don't understand how she got 595 from the first equation, can you please show me the steps to get 595
O8(1000)-Fos)+(1000-FI6014)+4010) F = 595 X = (1 .000-595 X.6)-243 Y = (1.000-595)(.4)= 162Step by Step Solution
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