You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of Treasury bills...

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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 40% and 60%,respectively. X has an expected rate of
return of 0.12 and variance of 0.0081, and Y has an expectedrate of return of 0.09 and a variance
of 0.0016. The coefficient of correlation, rho, between X and Yis 0.45. If you decide to hold a
complete portfolio that has an expected outcome of $1,180
a. What will be the dollar values of your positions in X, Y, andTreasury bills,
respectively? (10%)
b. What is the risk for the risky portfolio P (10%)?
c. What is the SR for the risky portfolio P (5%)?
d. What is the risk for this complete portfolio C (5%)?
(Hint: risk in complete portfolio C is the product of y (theweight in P) and the risk of P.
e. What is the SR for this complete portfolio C (5%)?

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You are considering investing $1,000 in a complete portfolio.The complete portfolio is composedof Treasury bills that pay 5% and a risky portfolio, P,constructed with two risky securities, X andY. The optimal weights of X and Y in P are 40% and 60%,respectively. X has an expected rate ofreturn of 0.12 and variance of 0.0081, and Y has an expectedrate of return of 0.09 and a varianceof 0.0016. The coefficient of correlation, rho, between X and Yis 0.45. If you decide to hold acomplete portfolio that has an expected outcome of $1,180a. What will be the dollar values of your positions in X, Y, andTreasury bills,respectively? (10%)b. What is the risk for the risky portfolio P (10%)?c. What is the SR for the risky portfolio P (5%)?d. What is the risk for this complete portfolio C (5%)?(Hint: risk in complete portfolio C is the product of y (theweight in P) and the risk of P.e. What is the SR for this complete portfolio C (5%)?