You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045.
-What percentages of your money must be invested in the risky asset and the risk-free asset,respectively,to form a portfolio with an expected return of 0.13?
A)130.77% and -30.77%
B)-30.77% and 130.77%
C)67.67% and 33.33%
D)57.75% and 42.25%
E)cannot be determined

Question

Quizplus · Accepted Answer

The Answer of You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045.
-What percentages of your money must be invested in the risky asset and the risk-free asset,respectively,to form a portfolio with an expected return of 0.13?
A)130.77% and -30.77%
B)-30.77% and 130.77%
C)67.67% and 33.33%
D)57.75% and 42.25%
E)cannot be determined

You Invest $100 in a Risky Asset with an Expected