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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.)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92323908

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