on this repurchase agreement. (a) You are investing GHS100,000 in an investment portfolio made up of a risky ass and a T/Bill. The expected return of the risky asset is 11% and its standard deviation is 20% The rate of return of the T/Bill is 3% (a) Compute what percentages of your funds must be invested in the risky asset and the risk-free asset so that the expected return of your investment portfolio is 8% (b) Compute what percentages of your funds must be invested in the risk-free asset and the risky asset to form a portfolio with a standard deviation of 8%.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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on this repurchase agreement.
(a) You are investing GHS100,000 in an investment portfolio made up of a risky ass and
a T/Bill. The expected return of the risky asset is 11% and its standard deviation is 20%
The rate of return of the T/Bill is 3%
(a) Compute what percentages of your funds must be invested in the risky asset and the
risk-free asset so that the expected return of your investment portfolio is 8%
(b) Compute what percentages of your funds must be invested in the risk-free asset and the
risky asset to form a portfolio with a standard deviation of 8%.
Transcribed Image Text:on this repurchase agreement. (a) You are investing GHS100,000 in an investment portfolio made up of a risky ass and a T/Bill. The expected return of the risky asset is 11% and its standard deviation is 20% The rate of return of the T/Bill is 3% (a) Compute what percentages of your funds must be invested in the risky asset and the risk-free asset so that the expected return of your investment portfolio is 8% (b) Compute what percentages of your funds must be invested in the risk-free asset and the risky asset to form a portfolio with a standard deviation of 8%.
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