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 $1,120?
A)Cannot be determined
B)$568; $378; $54
C)$568; $54; $378
D)$378; $54; $568
E)$108; $514; $378

Question

Quizplus · Accepted Answer

The expected outcome of the portfolio is $1,120. The portfolio consists of three positions: X, Y, and T-bills. Let's denote the dollar value of the positions in X, Y, and T-bills as x, y, and z, respectively. We have the following equation:x + y + z = 1,120We do not have enough information to determine the individual values of x, y, and z. However, we can determine the relative values of these positions. Since the expected outcome of the portfolio is positive, we know that the sum of the expected outcomes of the individual positions must also be positive. This means that x, y, and z must all be positive.The only choice that satisfies these conditions is B: $568; $378; $54.

What Would Be the Dollar Value of Your Positions in X,Y,and