Problem 3. Consider the following information about Stocks A, B and C: Amount Invested Beta A $100,000 0.35 The amount invested in Stock C is B $150,000 1.20 C ? 1.40 How much would you have to invest in Stock C to create a portfolio that has as much systematic risk as the market portfolio?

Problem 3. Consider the following information about Stocks A, B and C: Amount Invested Beta A $100,000 0.35 The amount invested in Stock C is B $150,000 1.20 C ? 1.40 How much would you have to invest in Stock C to create a portfolio that has as much systematic risk as the market portfolio?

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

Section: Chapter Questions

Problem 1PS

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Question

Problem 3. Consider the following information about Stocks A, B and C:
Amount Invested
Beta
A
$100,000
0.35
The amount invested in Stock C is
B
$150,000
1.20
C
?
1.40
How much would you have to invest in Stock C to create a portfolio that has as much systematic risk as the market portfolio?

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