Question

7. You have a portfolio comprised of three assets: (1) $80,000 invested in Treasury bills that have an expected return of 4.5%, (2) $60,000 in Ford Motors that has an

expected return of 8.0%, and (3) $60,000 in Harley Davidson with an expected return of 12.0%.a. What was the general equation that will result from the \text { following specific equation: } .40=\frac{80,000}{60,000+80,000+60,000} \text { b. What is the specific equation that results from the following } \text { general equation: } \mathrm{E}\left(\mathrm{r}_{\mathrm{p}}\right)=\mathrm{w}_{\mathrm{FM}}^{*} \mathrm{E}\left(\mathrm{r}_{\mathrm{FN}}\right)+\mathrm{w}_{\mathrm{TB}}^{*} \mathrm{E}\left(\mathrm{r}_{\mathrm{TB}}\right)+\mathrm{w}_{\mathrm{HD}} * \mathrm{E}\left(\mathrm{r}_{\mathrm{HD}}\right)

Fig: 1

Fig: 2

Fig: 3

Fig: 4