Question
You want your portfolio beta to be 1.20. Currently, your portfolio consists of $100 invested in stock R with a beta of 1.4 and $300
You want your portfolio beta to be 1.20. Currently, your portfolio consists of $100 invested in stock R with a beta of 1.4 and $300 in stock K with a beta of 0.6. You have another $400 to invest and want to divide it between an asset with a beta of 1.6 and a risk-free asset. How much should you invest in the risk-free asset?
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Financial Markets And Institutions
Authors: Jeff Madura
6th Edition
0324162618, 978-0324162615
