An investor invest 40 percent of his wealth in a risky asset with an expected rate of return of 18% and a variance of 10% and 60% in a t-bill that pays 4 percent. His portfolio's expected return is
PORTFOLIO RETURN = SUM OF (WEIGHT OF ASSET X RETURN)
PORTFOLIO RETURN = (40% X 18%) + (60% X 4%) = 9.60%
ANSWER : 9.60% (Thumbs up please)
An investor invest 40 percent of his wealth in a risky asset with an expected rate...