Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

image text in transcribed

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%. A. $595,$162;$243 B. $162;$595;$243 C. $243;$162;$595 D. $243;$162;$595 E. $595;$243,$162

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started