w(I) + w(II) = 1
w(I) = 1 - w(II)
Portfolio's Expected Return = [w(I) * Return(I)] + [w(II) * Return(II)]
15% = [{1 - w(II)} * 18%] + [w(II) * 10%]
15% = 18% - [w(II) * 18%] + [w(II) * 10%]
15% - 18% = -[w(II) * 8%]
-3% = -[w(II) * 8%]
w(II) = 3% / 8% = 0.375, or 37.50%
w(I) = 1 - w(II) = 1 - 0.375 = 0.625, or 62.50%
OPEN ENDED Question 3. Provide your calculations with your answer. Assume that you want to construct...
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