You Are Considering Investing $1000 in a Complete Portfolio

Multiple Choice

You are considering investing $1000 in a complete portfolio. The complete portfolio is composed of Treasury notes 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 an expected rate of return of 14% and Y has an expected rate of return of 10%. The dollar values of your positions in X, Y, and Treasury notes would be ________, ________ and ________ respectively if you decide to hold a complete portfolio that has an expected return of 8%.

A) $162, $595, $243
B) $243, $162, $595
C) $595, $162, $243
D) $595, $243, $162