Business, 11.10.2020 23:01 TheSillyMichael1566

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 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%. The risky portfolio, P, has a standard deviation of 0.7. Assuming you decide to hold a complete portfolio that has an expected return of 8%.a. What is the expected return of your risky portfolio? (Round your answer to the first decimal place)Continue from the previous problem, and use your answer from #4 for the following question:What is the weight you invested in Treasury bills? What is the weight you invested in the risky portfolio?hint: rc = wprp + wfrf; and wf = 1-wp0.08 = wprp + (1-wp) 0.05 (where rp is your answer from #4)

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