You Are Considering Investing $1000 in a Complete Portfolio

question 23

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 11%, you should invest ________ of your complete portfolio in Treasury notes.

• A)19%
• B)25%
• C)36%
• D)50%

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Definitions:

Internal Supply Estimates

Projections or assessments of the availability of resources, personnel, or capabilities within an organization to meet its current or future needs.

Economic Force

A factor that influences the direction and dynamics of an economy, including elements like supply and demand, inflation, and government policy.

Increased Automation

The growing use of machines and technology to perform tasks that were traditionally done by humans, leading to enhanced efficiency but also potential job displacement.

Human Resource Information System

An integrated system designed to help manage HR processes, employee data, and organizational policies and procedures, often through technology.