18. Analyzing a Portfolio (LO4, CFA2) You have $ 100,000 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 13 percent and that has only 70 percent of the risk of the overall market. If X has an expected return of 31 percent and a beta of 1.8, Y has an expected return of 20 percent and a beta of 1.3. and the risk-free rate is 7 narss-t much monev will vou invest in Stock Y? How do you explain your answer? 19. Systematic versus Unsystematic Risk (LO2, CFA4) Consider the following information on Stocks I and II: Rate of Return if State Occurs Stock I Stock II State of Economy Probability of State of Economy Recession .30 .05 -.18 Normal .40 .19 .14 Irrational exuberance .30 .13 .29 The market risk premium is 8 percent and the risk-free rate is 5 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain. T. 20. Dy --- --...auc Risk (LO2, CFA4) The beta for a certain stock is 1.15, the risk-free rate is 5 percent, and the expected return on the market is 13 percent. Complete the following table to decompose the stock's return into the systematic return and the unsystematic return