Assume that you are constructing a portfolio with a target value of $1 million. You currently have $325,000 invested in Tesla and $214,000 invested in Apple. Assume that the betas of Tesla and Apple are 1.25 and 1.15, respectively. You want to create a portfolio that has an overall beta of 1.0 by investing in Altria and the risk-free asset. The beta of Altria is 0.60. How much do you invest in the risk-free asset?

• A. -$118,417
• B. $118,417
• C. $232,015
• D. $115,244
• E. $100,000

Average Return Standard Deviation Frequency Distribution Series Large-company stocks 12.1% 20.2% | Small-company stocks 16.9 32.3 hom. Long-term corporate bonds 6.3 8.4 Long-term government bonds 5.9 9.8 . Intermediate-term government bonds 5.4 5.7 U.S. Treasury bills 3.5 3.1 II. Inflation 3.0 4.1