You have $102,000 to invest in a portfolio containing Stock X, Stock Y, and a ri
ID: 2715006 • Letter: Y
Question
You have $102,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 11 percent and that has only 80 percent of the risk of the overall market. If X has an expected return of 25 percent and a beta of 2.1, Y has an expected return of 16 percent and a beta of 1.4, and the risk-free rate is 5 percent, how much money will you invest in Stock Y? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)
You have $102,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 11 percent and that has only 80 percent of the risk of the overall market. If X has an expected return of 25 percent and a beta of 2.1, Y has an expected return of 16 percent and a beta of 1.4, and the risk-free rate is 5 percent, how much money will you invest in Stock Y? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)
Explanation / Answer
You have $102,000 to invest in a portfolio containing Stock X, Stock Y, and a ri
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