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 40% and 60% respectively. X has an expected rate of return of 12%, and Y has an expected rate of return of 9%. To form a complete portfolio with an expected rate of return of 8%, 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.
57.69%; 23.076%; 34.614% | ||
60.78%; 24.312%; 36.468% | ||
52.89%; 21.156%; 31.734% | ||
55.98%; 22.392%; 33.588% |
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