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You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 4% and a risky portfolio, P,
You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 4% and a risky portfolio, P, constructed with 2 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 18% and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 10%, what percentage of your complete portfolio should you invest in treasury bills?
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