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You want to create a portfolio equally as risky as the market, you have $1,200,000 to invest. Consider the following: Asset Investment Beta Stock A
You want to create a portfolio equally as risky as the market, you have $1,200,000 to invest. Consider the following: |
Asset | Investment | Beta |
Stock A | $300,000 | 0.90 |
Stock B | $300,000 | 1.20 |
Stock C |
| 1.50 |
Risk-free asset |
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Required: |
(1) | What is the investment in Stock C? (Do not round.) |
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| A. $364,800 B. $361,000 C. $380,000 D. $395,200 E. $233,333 |
(2) | What is the investment in risk-free asset? (Do not round) |
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