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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 35% and 65% respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 14%, you should invest approximately in the risky portfolio. This will mean you will of your complete 6 also invest approximately and portfolio in security X and Y, respectively.

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 35% and 65% respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 14%, you should invest approximately in the risky portfolio. This will mean you will of your complete 6 also invest approximately and portfolio in security X and Y, respectively.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 16P
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QUESTION 13 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 35% and 65% respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 14%, you should invest approximately in the risky portfolio. This will mean you will and of your complete also invest approximately portfolio in security X and Y, respectively. 25%; 45%; 30% 140%; 49%; 91% 78%; 27%; 51% 50%; 25%; 25%
Transcribed Image Text:QUESTION 13 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 35% and 65% respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 14%, you should invest approximately in the risky portfolio. This will mean you will and of your complete also invest approximately portfolio in security X and Y, respectively. 25%; 45%; 30% 140%; 49%; 91% 78%; 27%; 51% 50%; 25%; 25%
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