(Answered) Suppose the risk-free interest rate is 4 and the market

Finance

Suppose the risk-free interest rate is 4% and the market portfolio has an expected return of 10% and a volatility of 16%. Star plc stock has a 30% volatility and a correlation with the market of 0.6. You want to create a portfolio consisting of shares in Star plc plus a risk-free asset. You would like this portfolio to have the same beta as the market. What proportion of your money should you invest in each asset?

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