You are working on creating a portfolio that mimics a fully diversified market index. Assume that you have $1 million fund to invest. You plan to allocate $195,000 and $365,000 of your fund to invest in stock A and B, respectively. To achieve your goal, you need to add an additional risky stock C and a risk-free bond to your portfolio. How much would you invest in stock C and risk-free bond?
You are working on creating a portfolio that mimics a fully diversified market index. Assume that you have $1 million fund to invest. You plan to allocate $195,000 and $365,000 of your fund to invest in stock A and B, respectively. To achieve your goal, you need to add an additional risky stock C and a risk-free bond to your portfolio. How much would you invest in stock C and risk-free bond?
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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You are working on creating a portfolio that mimics a fully diversified market index.
Assume that you have $1 million fund to invest. You plan to allocate $195,000 and $365,000
of your fund to invest in stock A and B, respectively. To achieve your goal, you need to add an
additional risky stock C and a risk-free bond to your portfolio. How much would you invest in
stock C and risk-free bond?
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