Explanation:
The allocation for each asset is given by .
For machinery = $0.68 \times `6`,200 = \`4,216$ million For vehicles = 0.32` \times \`6,200 = \ million
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Q.4708 Consider a company that allocates $6,200 million to two asset classes, machinery, and vehicles.
| Asset Class | Weights | Volatility |
|---|---|---|
| Machinery | 68% | 14.2% |
| Vehicles | 32% | 18.8% |
Which of the following gives the capital allocation for each asset?
A
Machinery: $880; Vehicles: $1,165
B
Machinery: $4,622; Vehicles: $9823
C
Machinery: $4,216; Vehicles: $1,984
D
Machinery: $1,452; Vehicles: $6,956
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