You have $25,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 13 percent and Stock Y with an expected return of 7 percent.

Required:

(a)	If your goal is to create a portfolio with an expected return of 11.8 percent, how much money will you invest in Stock X?
	(Click to select) $19,000 $20,800 $20,000 $49,167 $21,000

(b)	If your goal is to create a portfolio with an expected return of 11.8 percent, how much money will you invest in Stock Y?
	(Click to select) $5,250 $5,200 $4,750 $5,000 $4,800

You own a portfolio that has $2,150 invested in Stock A and $3,250 invested in Stock B. If the expected returns on these stocks are 11 percent and 14 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

Multiple Choice

• 12.50%

• 13.06%

• 13.45%

• 12.19%

• 12.81%

A stock has an expected return of 13 percent, its beta is 1.25, and the expected return on the market is 11 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)

Multiple Choice

• 3.15%

• 3.00%

• -0.75%

• 3.12%

• 2.85%

You want to create a portfolio equally as risky as the market, and you have $1,100,000 to invest. Consider the following information:

Asset	Investment	Beta
Stock A	$165,000	0.65
Stock B	$385,000	1.10
Stock C		1.50
Risk-free asset

Required:

(a)	What is the investment in Stock C? (Do not round your intermediate calculations.)
	(Click to select) $265,833 $364,320 $379,500 $360,525 $394,680

(b)	What is the investment in risk-free asset? (Do not round your intermediate calculations.)
	(Click to select) $163,680 $170,500 $161,975 $284,167 $177,320

A portfolio is invested 15 percent in Stock G, 55 percent in Stock J, and 30 percent in Stock K. The expected returns on these stocks are 11 percent, 20 percent, and 25 percent, respectively. What is the portfolio's expected return?

Multiple Choice

• 19.14%

• 20.15%

• 21.16%

• 14.93%

• 20.96%