following securities are listed on the Madrid Stock Exchange: Assets with risk: XIC: E (r): 25%...

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following securities are listed on the Madrid Stock Exchange: Assets with risk: XIC: E (r): 25% and Risk (s): 18.0%, and CLC assets: E (r) 16%, and Risk (s): 6.2%. Being the correlation of these titles, measured by p is equal to 0.2. Assets without risk: Treasury bills. They are issued by the Spanish State in the short term, up to 18 months: 6% With this information: REQUESTED: a).- If you only invest in securities with risk, calculate the expected return, and the total risk of investment portfolios formed with the following percentages: Portfolios XIC 10% 30% 50% 0% 1 2 3 4 CLC 90% 70% 50% 100% b).- Calculate the optimal combination of XIC and CLC shares, knowing that you can also lend and borrow at the risk-free interest rate, and the market is in equilibrium. following securities are listed on the Madrid Stock Exchange: Assets with risk: XIC: E (r): 25% and Risk (s): 18.0%, and CLC assets: E (r) 16%, and Risk (s): 6.2%. Being the correlation of these titles, measured by p is equal to 0.2. Assets without risk: Treasury bills. They are issued by the Spanish State in the short term, up to 18 months: 6% With this information: REQUESTED: a).- If you only invest in securities with risk, calculate the expected return, and the total risk of investment portfolios formed with the following percentages: Portfolios XIC 10% 30% 50% 0% 1 2 3 4 CLC 90% 70% 50% 100% b).- Calculate the optimal combination of XIC and CLC shares, knowing that you can also lend and borrow at the risk-free interest rate, and the market is in equilibrium.

Answer rating: 100% (QA)

Answer a To calculate the expected return and total risk of investment portfolios formed with different percentages of XIC and CLC shares we need to use the formula for portfolio returns and risks Let... View the full answer