Answer:
y = x + -2.3
x = -y - 2.3 (but why would one need this?...)
Step-by-step explanation:
(6.1 - (-9.7))/(8.4 - (-7.4)) = 15.8/15.8 = 1
6.1 = 8.4 + b
b = -2.3
It's C. move all terms to the left side and set equal to zero. then set each factor equal to zero.
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.
4x-7: "seven less than" means you're going to subtract it from the upcoming value, which is "the product of four and a number". "a number" refers to an unknown variable, which I chose to be x. So put it all together and you get 4x-7
