You Are Considering Investing $1,000 in a T-Bill That Pays

question 62

Multiple Choice

You are considering investing $1,000 in a T-bill that pays 0.05 and a risky portfolio,P,constructed with 2 risky securities,X and Y.The weights of X and Y in P are 0.60 and 0.40,respectively.X has an expected rate of return of 0.14 and variance of 0.01,and Y has an expected rate of return of 0.10 and a variance of 0.0081.If you want to form a portfolio with an expected rate of return of 0.11,what percentages of your money must you invest in the T-bill and P,respectively?

• A) 0.25;0.75
• B) 0.19;0.81
• C) 0.65;0.35
• D) 0.50;0.50
• E) cannot be determined

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Definitions:

Antisocial

Behaviors that go against social norms and can harm or lack consideration for the well-being of others.

Hurtful Behavior

Actions or words that cause distress or pain to another person, whether intentional or unintentional.

Intent

The purpose or objective behind someone's actions or a particular design.

Instrumental Aggression

Behavior intended to achieve a goal other than causing pain, often used as a means to an end.