You have $116,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 11 percent and that has only 60 percent of the risk of the overall market. If X has an expected return of 28 percent and a beta of 1.8, Y has an expected return of 18 percent and a beta of 1.1, and the risk-free rate is 7 percent, how much money will you invest in Stock Y? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.) Amount $

You have $116,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 11 percent and that has only 60 percent of the risk of the overall market. If X has an expected return of 28 percent and a beta of 1.8, Y has an expected return of 18 percent and a beta of 1.1, and the risk-free rate is 7 percent, how much money will you invest in Stock Y? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.) Amount $

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 have 100.000$ to invest in either Stock D, Stock F, or a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10.5 percent. If D . has an expected return of 13.2 percent, F has an expected return 9.5 percent, and the risk-free rate is 3.8 percent, and if you invest 50.000$ in Stock D, how much will you invest in Stock F?
Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 33%. The T-bill rate is 7%. Your risky portfolio includes the following investments in the given proportions: Stock A Stock B Stock C 30% 35 35 Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 16%. Required: a. What is the proportion y? (Round your answer to 1 decimal place.) Proportion y % b. What are your client's investment proportions in your three stocks and in T-bills? (Round your intermediate calculations and final answers to 2 decimal places.) Security Investment Proportions T-Bills % Stock A % Stock B % Stock C %
You have $95,621 to invest in two stocks and the risk-free security. Stock A has an expected return of 13.32 percent and Stock B has an expected return of 9.77 percent. You want to own $31,048 of Stock B. The risk-free rate is 3.14 percent and the expected return on the market is 10.25 percent. If you want the portfolio to have an expected return equal to that of the market, how much should you invest (in $) in the risk-free security? Answer to two decimals. (Hint: A negative answer is OK - it means you borrowed (rather than lent or invested) at the risk free rate.)
You invest 50% of your wealth in risky asset A and 50% in the risk-free asset. E(ra) is 10% and OA is 16%, while the risk- ree rate is 3%. The expected return on your portfolio is________ while the standard deviation is_________ Multiple Choice 6.50%,; 8.00% 7.90%; ,11.20% 5.80%; ,6.40% 7.20%; ,9.60%
You have been managing a $5 million portfolio that has a beta of 1.2 and a required rate of return of 12%. The risk- free rate is 6% You now receive another 1 million and invest in stocks with an average beta of 0.50. What will be the required rate of return on your new portfolio?
You invest $1000 in a portfolio. Your portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 10% and a treasury bill with a rate of return of 5%. __________ of your portfolio should be invested in the risk-free asset if you want your portfolio to have a standard deviation of 9%. A) 100% B) 90% C) 50% D) 10%
You want to invest $46,000 in a portfolio with a beta of no more than 1.34 and an expected return of 12.1%. Bay Corp. has a beta of 1.18 ar an expected return of 11.4%, and City Inc. has a beta of 1.76 and an expected return of 14.06%. The risk-free rate is 6%. Is it possible to create this portfolio investing in Bay Corp. and City Inc.? If so, how much will you invest in each? (Select from the drop-down menu.) Is it possible to create this portfolio investing in Bay Corp. and City Inc.? In Bay Corp., you should invest $ (Round to the nearest cent.) In City Inc., you should invest $ (Round to the nearest cent.)
You have been managing a $5 million portfolio that has a beta of 1.15 and a required rate of return of 9.025%. The current risk-free rate is 5%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.95, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. ___%
Nikul
You have $138,000 to invest in a portfolio containing Stock X, Stock Y, and a risk - free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 13 percent and that has only 76 percent of the risk of the overall market. If X has an expected return of 31 percent and a beta of 1.8, Y has an expected return of 20 percent and a beta of 1.2, and the risk - free rate is 7 percent, how much money will you invest in Stock Y?
You want to invest $45,000 in a portfolio with a beta of no more than 1.44 and an expected return of 14.3%. Bay Corp. has a beta of 0.83 and an expected return of 10.8%, and City Inc. has a beta of 1.9 and an expected return of 16.98%. The risk-free rate is 6%. You can invest in Bay Corp. and City Inc. How much will you invest in each?
You have been managing a $5 million portfolio that has a beta of 1.05 and a required rate of return of 6.675%. The current risk-free rate is 3%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.25, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

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