You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 5% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 60% and 40%, respectively. X has a return volatility of 25%, and Y has a return volatility of 30%. The correlation between X and Y is -0.2. If you decide to hold a complete portfolio that has a return volatility of 15%, how much should you invest in the Treasury bills? $1,000 $687 $130 $220

Q: "An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected…

A: Optimum risk portfolio is 0.084Explanation:

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A:

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A:

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