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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.
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 to create a portfolio that has an expected return of 14 percent and that has only 60 percent of the overall market. If X has an expected return of 32 percent and a beta of 1.7 and Y has an expected return of 18 percent and a beta of 1.2, and the risk free rate is 6 percent, how much money will you invest in stock Y?
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