Question: Consider a binomial tree with one future period (T=0,1) in which the price can go up to $22 or decrease to $16. The price of

Consider a binomial tree with one future period (T=0,1) in which the price can go up to $22 or decrease to $16. The price of the asset at T=0 is $20, and there is an equal chance that it goes up or down at T=1. The investor starts with an initial wealth of $1,000. The risk-free asset yields a return of zero percent. If the investor wants to achieve an expected return of 10%, what fraction of her wealth should the investor allocate to the risky asset? Select one: -25% 25% x 100% -50% O None of the options provided 50%
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