Expected rate of return equal

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Your complete portfolio is worth a total of $1,000 and can be formed out of 2 assets: a risk-free asset that has a rate of return of 5% and a risky portfolio with an expected return of 8%. If you want your complete portfolio to have an expected rate of return equal to 5%, you must:

A: Invest $1,000 in the risk-free asset

B: Invest $500 in the risk-free asset

C: Invest %1,000 in the risky portfolio

D: Invest more than $1,000 in the risky portfolio

Reference no: EM133074665

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