What proportion should be invested in the treasury bill


Problem

A risky portfolio is made up of Stock A and Stock B. The optimal weights of Stock A and Stock B are 30% and 70%, respectively. Stock A has an expected rate of return of 12%, and Stock B has an expected rate of return of 9%. Treasury bills pay 4.20%. What proportion (weight) should be invested in the Treasury Bill to form a complete portfolio with an expected rate of return of 9.25%?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What proportion should be invested in the treasury bill
Reference No:- TGS03258254

Expected delivery within 24 Hours