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Artyom0805 [142]
2 years ago
11

You are considering investing $2,600 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% a

nd a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 60% and 40% respectively. X has an expected rate of return of 16%, and Y has an expected rate of return of 11%. To form a complete portfolio with an expected rate of return of 8%, 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.
Business
2 answers:
dalvyx [7]2 years ago
5 0

Answer:

40% 24% 16%.......................

lorasvet [3.4K]2 years ago
3 0

Answer:

40% , 24% and 16%

Explanation:

Total Amount invested = $2600

Portfolio is composed of :

Treasury bills paying 4%,  Risky portfolio P,  Two risky securities ( X and Y )

Optimal weights

X = 60% , Y = 40%

Expected rate of return

X = 16% ,  Y = 11%

<u>To form a complete portfolio with an expected rate of return of 8% </u>

Invest approximately 40% in risky portfolio

Invest approximately 24% and 16% of your complete portfolio in security X and Y

attached below is the detailed solution

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