Question
You have $100,000 to invest and want to choose between two stocks and the risk-free asset. Security E(r) Beta Investment Stock 1 0.1174 1.8 $20,000
You have $100,000 to invest and want to choose between two stocks and the risk-free asset.
| Security | E(r) | Beta | Investment |
| Stock 1 | 0.1174 | 1.8 | $20,000 |
| Stock 2 | 0.0873 | 1.1 | ? |
| Risk-free asset | 0.04 | ? | ? |
You want your portfolio to be as risky as the market overall.
Part 1
What is the expected return of your portfolio?
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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
