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...


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 inP are 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.



Jun 01, 2022
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