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Peter's retirement plan offers 2 choices for investment: invests in the total stock market or invests in Treasury Bills. He is not allowed to borrow
Peter's retirement plan offers 2 choices for investment: invests in the total stock market or invests in Treasury Bills. He is not allowed to borrow or short. Moreover, his risk aversion nature makes him choose a combination of stock market fund and Treasury Bills that similar to a fund that has a beta of 1.27.
What is the percentage of investment in stock market should Peter do if he wants to reach the desired level of market risk (with beta = 1.27) ?
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