How much money should be invested in stock


Question:

A $100,000 dollars is available to invest in portfolio containing stock X. stock Y, and a risk-free asset. All of the money must be invested. The goal is to create a portfolio that has an expected return of 12.5 and that has only 60 % of the risk of the overall market. If X has an expected return of 31 % and a beta of 1.8, Y has an expected return of 20 % and a beta of 1.5, and the risk-free rate is 6 %, how much money should be invested in stock X.

Solution Preview :

Prepared by a verified Expert
Finance Basics: How much money should be invested in stock
Reference No:- TGS02082598

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)