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Bill formed his optimal complete portfolio worth $1000 out of 2 assets: A T-bill with a return of 5%, and a risky portfolio P with an expected return of 15% and a return volatility of 20%. Bill's coefficient of risk aversion is 2. Which of the following statements is true about Bill's optimal complete portfolio? O Bill invests nothing in the risky portfolio P. Bill buys $500 worth of the T-bill. O Bill invests $1000 in the risky portfolio. O Bill borrows $250 at the risk free rate.

Bill formed his optimal complete portfolio worth $1000 out of 2 assets: A T-bill with a return of 5%, and a risky portfolio P with an expected return of 15% and a return volatility of 20%. Bill's coefficient of risk aversion is 2. Which of the following statements is true about Bill's optimal complete portfolio? O Bill invests nothing in the risky portfolio P. Bill buys $500 worth of the T-bill. O Bill invests $1000 in the risky portfolio. O Bill borrows $250 at the risk free rate.

Essentials Of Investments
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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QUESTION 12 Bill formed his optimal complete portfolio worth $1000 out of 2 assets: A T-bill with a return of 5%, and a risky portfolio P with an expected return of 15% and a return volatility of 20%. Bill's coefficient of risk aversion is 2. Which of the following statements is true about Bill's optimal complete portfolio? O Bill invests nothing in the risky portfolio P. O Bill buys $500 worth of the T-bill. O Bill invests $1000 in the risky portfolio. O Bill borrows $250 at the risk free rate.
Transcribed Image Text:QUESTION 12 Bill formed his optimal complete portfolio worth $1000 out of 2 assets: A T-bill with a return of 5%, and a risky portfolio P with an expected return of 15% and a return volatility of 20%. Bill's coefficient of risk aversion is 2. Which of the following statements is true about Bill's optimal complete portfolio? O Bill invests nothing in the risky portfolio P. O Bill buys $500 worth of the T-bill. O Bill invests $1000 in the risky portfolio. O Bill borrows $250 at the risk free rate.
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