INseume that an investor has formed a portfolio of Awo nesets; aBset A and aset B,if he invested 30% of his weath in aSset A. Tf the return on asset A 1s 20% CInd the return on the gsset BB HDt, the weight of the weath invested in 13set B 1S. (a) 70% O we cannot find the weight d) 60% | Referring to question 1o above the portfolio's return 15 H0% () 30%

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 7PROB
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0. Nssume that an investor ham formed a portfolio of
Hwo nesets; Bset A and aset B,if he invested
30% of his weath in asset A. Tf the return
Ion asset A s 20% Cind the return on the gsset
BB HDt, the weight of the wealth Invested in
13set B 1S.
70%
O we cannot find the weight
ld) 60%
(a)
3.
Referring to questLon 10 above,the porifolio's
return 15
(ay H0%
()34%
(0 30%
(d) 3T%
Transcribed Image Text:0. Nssume that an investor ham formed a portfolio of Hwo nesets; Bset A and aset B,if he invested 30% of his weath in asset A. Tf the return Ion asset A s 20% Cind the return on the gsset BB HDt, the weight of the wealth Invested in 13set B 1S. 70% O we cannot find the weight ld) 60% (a) 3. Referring to questLon 10 above,the porifolio's return 15 (ay H0% ()34% (0 30% (d) 3T%
Expert Solution
Step 1

A mixture of different kinds of funds and securities for the investment is term as the portfolio.

Step 2

a.

Computation of the weight of Asset B:

Finance homework question answer, step 2, image 1

Hence, option a is correct.

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