Question
You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 6% 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 6% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 40% and 60%, 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 7%.
$341.9087; $79.2271; $578.8642 | ||
$112.3768; $90.8723; $796.7509 | ||
$81.3409; $165.4898; $753.1693 | ||
$71.4286; $107.1428; $821.4286 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started