You have $116,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17.8 percent. Stock X has an expected return of 13.4 percent and a beta of 1.30, and Stock Y has an expected return of 7.9 percent and a beta of .80. a. How much money will you invest in Stock Y? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) b. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Investment in Stock Y b. Portfolio beta
You have $116,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17.8 percent. Stock X has an expected return of 13.4 percent and a beta of 1.30, and Stock Y has an expected return of 7.9 percent and a beta of .80. a. How much money will you invest in Stock Y? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) b. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Investment in Stock Y b. Portfolio beta
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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Transcribed Image Text:You have $116,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to
create a portfolio that has an expected return of 17.8 percent. Stock X has an expected
return of 13.4 percent and a beta of 1.30, and Stock Y has an expected return of 7.9
percent and a beta of .80.
a. How much money will you invest in Stock Y? (Do not round intermediate
calculations. A negative answer should be indicated by a minus sign.)
b. What is the beta of your portfolio? (Do not round intermediate calculations and
round your answer to 3 decimal places, e.g., 32.161.)
a. Investment in Stock Y
b. Portfolio beta
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