Explosive BetaSML Funds is a fund management company that has created a family of exchange traded (mutual) funds that are designed to put investors at various points along the Security Market Line. One of Explosive's products, called the Market Bull Plus fund, is designed to provide a return that is twice the market index's return. The Market Bull Plus fund is constructed by borrowing money at the risk-free rate and then buying market index units (exchange traded funds which mimic the market index). If the cost of borrowing is 4% and the expected return on the market is 9.00%, then what is the portfolio weight of the market index for the Market Bull Plus fund?
The portfolio weight of the market index for the Market Bull Plus fund is