You have £10,000 and intend to invest £4,000 in the shares of ABC plc and the rest in those of XYZ plc. You notice that the returns (20% p.a.) on XYZ plc's shares are on average higher than those (15% p.a.) on ABC plc's shares. You want to borrow £5,000 risk-free funds at a rate of 5% to add to your investment in the shares of XYZ plc. What will be the weight of your investment in the shares of XYZ plc in your total investment, if you implement your plan?

Answer rating: 100% (QA)

To determine the weight of your investment in the shares of XYZ plc we nee... View the full answer