You Are Considering Investing $1,000 in a Complete Portfolio

question 49

Multiple Choice

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%.
-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%

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Definitions:

Nerve

Bundle of long axons outside the central nervous system.

Collagenous Fibers

Strong, flexible protein fibers found in connective tissue that provide support and structure to various body parts.

Elastic Fibers

Part of the connective tissue in the body that provides elasticity and resilience to structures like the skin, lungs, and blood vessels.

Connective

Tissue that supports, connects, or separates different types of tissues and organs in the body.