Answer:
y = 0.80
Step-by-step explanation:
Given:
- The expected rate of return for risky portfolio E(r_p) = 0.18
- The T-bill rate is r_f = 0.08
Find:
Investing proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 16%.
What is the proportion y?
Solution:
- The proportion y is a fraction of expected risky portfolio and the left-over for the T-bill compliance. Usually we see a major proportion is for risky portfolio as follows:
E(r_c) = y*E(r_p) + (1 - y)*r_f
y*E(r_p) + (1 - y)*r_f = 0.16
- Re-arrange for proportion y:
y = ( 0.16 - r_f ) / (E(r_p) - r_f)
- Plug in values:
y = ( 0.16 - 0.08 ) / (0.18 - 0.08)
y = 0.80
- Hence, we see that 80% of the total investment budget becomes a part of risky portfolio returns.
Answer:
A
Step-by-step explanation:
can you please mark me brainlest :D
Answer:
Ask: To check and make sure your answer is correct
Share: Subtracting a number is the same as adding its opposite. So, subtracting a positive number is like adding a negative; you move to the left on the number line. Subtracting a negative number is like adding a positive; you move to the right on the number line.
Step-by-step explanation:
Simplify y=8x+2x+2: y=10x+2
Same as equation y=10x+2
Therefore it has infinitely many solutions
Answer:A number decreased by 40
Step-by-step explanation: I really don't feel like explaining this lol...
