Mr Malone wants to change the overall risk of his portfolio Currently his portfolio is a combination of risky assets with a beta of 1 25 and an expected return of 14 Mr Malone will add a risk free asset (U S Treasury bill) to his portfolio If he wants a beta of 1 0, what percent of his wealth shoul...

The weight in the riskfree asset is 1 w and the ...

Mr. Malone wants to change the overall risk of his portfolio. Currently his portfolio is a combination

Question:

Mr. Malone wants to change the overall risk of his Currently his is a combination of risky assets with a beta of 1.25 and an of 14%. Mr. Malone will add a risk-free asset (U.S. Treasury bill) to his If he wants a beta of 1.0, what percent of his wealth should be in the risky and what percent should be in the risk-free asset? If he wants a beta of 0.75? If he wants a beta of 0.50? If he wants a beta of 0.25? Is there a pattern here?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...