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You Are Considering Investing $1,000 in a T-Bill That Pays

Question 3

Multiple Choice

You are considering investing $1,000 in a T-bill that pays 0.05 and a risky portfolio,P,constructed with 2 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 variance of 0.01,and Y has an expected rate of return of 0.10 and a variance of 0.0081.What would be the dollar value of your positions in X,Y,and the T-bills,respectively,if you decide to hold a portfolio that has an expected outcome of $1,200?


A) Cannot be determined
B) $54;$568;$378
C) $568;$54;$378
D) $378;$54;$568
E) $108;$514;$378

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