Ed Lawrence has $100,000 invested. Of that, $30,000 is invested in Tim Hortons stock, $25,000 is invested in T-bills, and the remainder is invested in corporate bonds. Which of the following is NOT
Correct regarding his portfolio weights? (All values are current market values.)
A) Ed has 30% of his portfolio invested in stocks.
B) Ed has 45% of his portfolio invested in corporate bonds.
C) Ed has 70% of his portfolio invested in assets other than stocks.
D) Ed has 70% of his portfolio invested in risk-free assets.
E) If Ed sells his corporate bonds and buys Suncor stock with the proceeds, he will end up with 75% of his portfolio invested in stocks.

Question

Quizplus · Accepted Answer

T-bills are considered risk-free assets, but corporate bonds are not. Therefore, Ed does not have 70% of his portfolio in risk-free assets.

Ed Lawrence Has $100,000 Invested