J
jensen
Member
What does the (Expected return - 5%)/std dev has anything to do with the suggested solution? Initially, I thought they assume it's CAPM so I used the formula for the proportion of A as:
x_a = (V_b - Covariance)/(V_a + V_b - 2Covariance)
such that x_a + x_b = 1
but obviously I got tricked.
x_a = (V_b - Covariance)/(V_a + V_b - 2Covariance)
such that x_a + x_b = 1
but obviously I got tricked.