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You have $90,979 to invest in two stocks and the risk-free security. Stock A has an expected retu of 12.78 percent and Stock B has an expected return of 11.68 percent. You want to own $26,82 Stock B. The risk-free rate is 5.44 percent and the expected return on the market is 10.56 percen you want the portfolio to have an expected return equal to that of the market, how much should invest (in $) in the risk-free security? Answer to two decimale (Hint JOK

You have $90,979 to invest in two stocks and the risk-free security. Stock A has an expected retu of 12.78 percent and Stock B has an expected return of 11.68 percent. You want to own $26,82 Stock B. The risk-free rate is 5.44 percent and the expected return on the market is 10.56 percen you want the portfolio to have an expected return equal to that of the market, how much should invest (in $) in the risk-free security? Answer to two decimale (Hint JOK

Essentials Of Investments
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
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You have $90,979 to invest in two stocks and the risk-free security. Stock A has an expected return of 12.78 percent and Stock B has an expected return of 11.68 percent. You want to own $26,820 of Stock B. The risk-free rate is 5.44 percent and the expected return on the market is 10.56 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.)
Transcribed Image Text:You have $90,979 to invest in two stocks and the risk-free security. Stock A has an expected return of 12.78 percent and Stock B has an expected return of 11.68 percent. You want to own $26,820 of Stock B. The risk-free rate is 5.44 percent and the expected return on the market is 10.56 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.)
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