You want to buy $20,000 worth of shares in Tootsie Roll Industries Inc.on margin,but you only have $10,000 of your own money to invest.The remaining $10,000 is borrowed by issuing T-Bills; assume the cost of borrowing is the risk-free rate.What is the portfolio weight for Tootsie Roll?
A) 0.25
B) 0.50
C) 1.00
D) 1.50
E) 2.00

Question

Quizplus · Accepted Answer

w_i = 11ea7fdb_fc09_b06b_a768_4b52b7368d5e_TB2902_11 w_i = 11ea7fdb_fc09_b06c_a768_6300a8b28229_TB2902_11 = 2.0

You Want to Buy $20,000 Worth of Shares in Tootsie