Question
You are considering investing $1,100 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% and a risky portfolio,P, constructed
You are considering investing $1,100 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% and a risky portfolio,P, constructed with two risky securities, X and Y. The optimal weights of X and Y inPare 60% and 40% respectively. X has an expected rate of return of 15%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 7%, 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. |
33%; 20%; 13%50%; 30%; 20%25%; 45%; 30%0%; 60%; 40%
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