Problem 11-27 Analyzing a Portfolio [LO 2] You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Stock A $133,000 Stock B $147,000 Stock C Risk-free asset Investment Beta .78 1.23 1.38 How much will you invest in Stock C? How much will you invest in the risk-free asset? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Investment in Stock C Investment in risk-free asset

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem 11-27 Analyzing a Portfolio [LO 2]
You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the
possible investments is given below:
Asset
Investment
Stock A
$ 133,000
Stock B $ 147,000
Stock C
Risk-free asset
Beta
.78
Investment in Stock C
Investment in risk-free
asset
1.23
1.38
How much will you invest in Stock C? How much will you invest in the risk-free asset?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Transcribed Image Text:Problem 11-27 Analyzing a Portfolio [LO 2] You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Stock A $ 133,000 Stock B $ 147,000 Stock C Risk-free asset Beta .78 Investment in Stock C Investment in risk-free asset 1.23 1.38 How much will you invest in Stock C? How much will you invest in the risk-free asset? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
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