You want to create a portfolio equally as risky as the market, and you have $1,100,000 to invest. You've already allocated a portion of your wealth to Stock A and Stock B, and you've decided to also invest money in Stock C and the risk-free asset. Consider the following information:
Asset Investment Beta
Stock A $165,000 0.70
Stock B $165,000 1.25
Stock C ? 1.55
Risk-free asset ? ?
Required: (a) How much should you invest in Stock C? (Do not round your intermediate calculations.)
(b) How much should you invest in the risk-free asset? (Do not round your intermediate calculations.)