Complete portfolio in treasury bills

Assignment Help Financial Management

Reference no: EM131939341

You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 5% and a risky portfolio, P, constructed with 2 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 14% and Y has an expected rate of return of 10%.

1. To form a complete portfolio with an expected rate of return of 11%, you should invest __________ of your complete portfolio in treasury bills.

A. 19%

B. 25%

C. 36%

D. 50%

2. 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.

A. 0%, 60%, 40%

B. 25%, 45%, 30%

C. 40%, 24%, 16%

D. 50%, 30%, 20%

Reference no: EM131939341

Questions Cloud

Design a comprehensive unit plan based on the goals : Design a comprehensive unit plan based on the goals identified for Maria. Summarize the recommended instructional strategies

Probability of assigning to the intervention condition : Among the first four pairs, what is the probability of assigning to the intervention condition: 1) zero females, 2) one female, 3) two females

Compute the probability that two randomly selected chips : (a) Compute the probability that two randomly selected chips are defective using conditional probability.?

What will be the dollar balances in the accounts receivable : The current unadjusted Allowance for Uncollectable Accounts balance is a debit balance of $3,500, what will be the dollar balances in the Accounts Receivable

Complete portfolio in treasury bills : To form a complete portfolio with an expected rate of return of 11%, you should invest __________ of your complete portfolio in treasury bills.

Find the population variance for the heights : 1. Find the population variance for the heights of the 50 males given. 2. Use the height data and the tables found in for the following:

How is twitter used in a professional learning network : Discuss what made your Twitter experience (un)successful, and whether you anticipate using it in the future - as a teacher or otherwise.

What is the ending balance in accounts receivable : What is the ending balance in accounts receivable and allowance for bad debts accounts at December 31, 2017 (After Adjustment)

Population in and find the population variance : 1. Use the data from the population in and find the population variance.

User Account

All Pages