Use the following information for questions .
There are two possible states of nature, s = 1, and s = 2, over the next period.There are two securities i and j) whose current prices are $10 and $15, respectively.Security i has a payoff of $10 in state s = 1, and $16 in state s = 2, while security j provides $25 in state s = 1 and $8 in state s = 2.
-If you want to get a payoff of $16 in state s = 1 and $12.8 in state s = 2, how would you allocate your wealth between the two securities i and j?
A)10% in I and 80% in J
B)10% in J and 90% in J
C)80% in I and 20% in J
D)70% in I and 20% in J
E)60% in I and 40% in J

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The Answer of Use the following information for questions .
There are two possible states of nature, s = 1, and s = 2, over the next period.There are two securities i and j) whose current prices are $10 and $15, respectively.Security i has a payoff of $10 in state s = 1, and $16 in state s = 2, while security j provides $25 in state s = 1 and $8 in state s = 2.
-If you want to get a payoff of $16 in state s = 1 and $12.8 in state s = 2, how would you allocate your wealth between the two securities i and j?
A)10% in I and 80% in J
B)10% in J and 90% in J
C)80% in I and 20% in J
D)70% in I and 20% in J
E)60% in I and 40% in J

Use the Following Information for Questions