Question: Explain both calculations with great detail This question has two sub-questions. Assume that t-bills generates a return of 3 %. Which of the following risky

 Explain both calculations with great detail This question has two sub-questions.

Explain both calculations with great detail

This question has two sub-questions. Assume that t-bills generates a return of 3 %. Which of the following risky portfolios is the optimal risky portfolio? Now assume that you wish to have a total expected return on your portfolio of 5 %, how much of your funds should be invested in the optimal risky portfolio, and how much in t-bills, respectively? Portfolio A Portfolio B Portfolio C E(r) 11% 12% 9 % 26 % 31% 25%

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