Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The answer I have written in the box is wrong. someone please help! You have $116,000 to invest in a portfolio containing Stock X, Stock
The answer I have written in the box is wrong. someone please help!
You have $116,000 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 60 percent of the risk of the overall market. If X has an expected return of 28 percent and a beta of 1.8, Y has an expected return of 18 percent and a beta of 1.1, and the risk-free rate is 7 percent, how much money will you invest in Stock Y? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.) Investment in Y $ 62,924Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started