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Nuada Airgetlam wants to create a $75,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 13.58 percent and stock B has an expected return of 11.39 percent. Nuada wants to own $27,000 of stock B. The risk-free rate is 4.07 percent and the expected return on the market is 9.87 percent. If Nuada wants the portfolio to have an expected return equal to that of the market, how much should he invest in the risk-free security?

Part B  Lugh owns a portfolio valued at $23,693. The portfolio consists of four stocks. Stock A is worth $4,858, stock B is worth $3,937, and stock C is worth $12,410. What is the portfolio weight (in percents) of stock D?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92722822

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