1 = 0W + 2(1 – W) W = 0.50 1 – W = 0.50. THE TWO CORNER PORTFOLI...

8. - L3 MOCK SAMPLE EXAM CFA LEVEL III GUIDELINE ANSWERS 2005
L3 MOCK SAMPLE EXAM CFA LEVEL III GUIDELINE ANSWERS 2005

8.1 = 8.0w + 8.2(1 – w)

w = 0.50

1 – w = 0.50. The two corner portfolios are equally weighted.

Return target = 8.145% = (1 + 0.075)(1 + 0.006%) – 1