Weight SPY Weight irn AAPL Weight in P&G; Oport CAL for this portfolio 2.91% 373

Question

Weight SPY Weight irn AAPL Weight in P&G; Oport CAL for this portfolio 2.91% 373% 5.15% 6.80% 3.08% 15.00% 6.76% 14.81% 28.91% 45.60% 8.48% 3.90% 90.33% | 81.46% | 65.94% | 47.60% | 88.43% | 81.10% | | Erl=0.4334*+.02 | Erl=0.4976*+ .02 | Erl=0.5330*+ .02 | Erl=0.5127*+ .02 | Erl=0.4500*+ .02 | Erl=0.4282*+.02 0.09725 0.10049 0.11960 0.15606 0.09740 0.09916 3 4 a) The optimal combination of the 3 risky assets is in this table. Which one is it, and how do you know? b) What is the risk-free (Treasury) rate I used here? c) what is the Elrl of the optimal portfolio vou chose in (a)? Round toxx.vvv% or .xxyyy d) Suppose you have an investment objective of 6%. what percentage of your assets should go towards investments in SPY, AAPL, P&G;, and Treasuries?

Explanation / Answer

1. 5th one is optimal combination as here the standard deviaiton is minimized
2. risk free rate is 2%..It is the intercept of CAL line
3. E(r)=0.45*0.0974+0.02=6.383%

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