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Nesterboy [21]
4 years ago
9

You are considering investing $1,000 in a T-bill that pays 0.05 and a risky portfolio, P, constructed with two risky securities,

X and Y. The weights of X and Y in P are 0.60 and 0.40, respectively. X has an expected rate of return of 0.14 and variance of 0.01, and Y has an expected rate of return of 0.10 and a variance of 0.0081. What would be the dollar values of your positions in X and Y, respectively, if you decide to hold 40% of your money in the risky portfolio and 60% in T-bills? Select one: $240; $360 $360; $240 $100; $240 $240; $160
Business
1 answer:
kozerog [31]4 years ago
5 0

Answer:

$240; $160

Explanation:

The computation is shown below:

As we know that

if there is 40% of money engaged in the risk portfolio is

= $1000 × 40%

= $400

Now amount in X is

= $400 × 0.60

= $240

And, the amount in Y is

= $400 × 0.40

= $160

hence, the last option is correct

All other valeus i.e. given in the question is not relevant. hence, ignored it

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