You are considering investing $1,000 in a T-bill paying 0.05 and a risky portfolio ( P) constructed with two risky securities, X and Y. The weights of X and Y in P are 0.60 and 0.40 respectively. X has an expected rate of return of 0.14 and a variance of 0.01, and Y has an expected rate of return of 0.10 and a variance of 0.0081.

 If you want to create a portfolio with an expected rate of return of 0.11, what percentage of your money should you invest in T-bills and P, respectively?

Answer rating: 100% (QA)

To determine the percentage of your money to invest in Tbills and the risky portfolio P in order to ... View the full answer