You Are Considering Investing $1000 in a Complete Portfolio

question 45

Multiple Choice

You are considering investing $1000 in a complete portfolio. The complete portfolio is composed of Treasury notes that pay 5% and 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 14% and Y has an expected rate of return of 10%. 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%

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Definitions:

Environmental Toxins

Substances found in the environment that can harm human health or the environment itself.

Toxic Sites

Locations contaminated with hazardous substances that pose a risk to human health and the environment.

Native Americans

Indigenous peoples of the United States, including both the mainland and Alaska, with distinct cultures, languages, and histories.

Social Differentiation

The process by which society categorizes individuals into different groups based on characteristics such as economic status, profession, age, or race.