Consider a market with only 3 assets with expected rates of return of 10%, 20%, and 10% respectively. Assume that one can construct two portfolios w and v, with these assets such that these portfolios...

Extracted text: Consider a market with only 3 assets with expected rates of return of 10%, 20%, and 10% respectively. Assume that one can construct two portfolios w and v, with these assets such that these portfolios lie on the minimum-variance set. Those portfolios are defined as follows: w=(0.6, 0.2, 0.2) and v= (0.8, -0.2, 0.4). Moreover, we assume that the market portfolio M is efficient. Using the two-fund theorem we know that the market portfolio can be expressed as a linear combination of w and v, M= x*w+ y*v for some constants x and y. Find the expression of the expected return of the market portfolio in terms of x and y. гм 3D0.12х +0.08y гм 3D0.08х +0.12y rм 3D0.6х +0.4y гм 3D0.4x +0.6у rм 30.8х +0.2у O O O