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Analysing a portfolio you have $ 100,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all
Analysing a portfolio 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 create a portfolio that has an expected return of 13.5 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 beta of 1.3, and the risk-free rate is 7 percent, how much money will you invest in stock X? How do you interpret your answer?
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