You want to create a $72,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 13.6 percent and Stock B has an expected return of 14.7 percent. You want to own $25,000 of Stock B. The risk-free rate is 3.6 percent and the expected return on the market is 12.1 percent. If you want the portfolio to have an expected return equal to that of the market, how much should you invest in the risk-free security? Seleccione una: O a. $12,775 Qb. $13,315 O c. $13,550 O d. $12,987 Oe. $12,921 ہے
You want to create a $72,000 portfolio comprised of two stocks plus a risk-free security. Stock A has an expected return of 13.6 percent and Stock B has an expected return of 14.7 percent. You want to own $25,000 of Stock B. The risk-free rate is 3.6 percent and the expected return on the market is 12.1 percent. If you want the portfolio to have an expected return equal to that of the market, how much should you invest in the risk-free security? Seleccione una: O a. $12,775 Qb. $13,315 O c. $13,550 O d. $12,987 Oe. $12,921 ہے
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 15MC
Related questions
Question
![You want to create a $72,000 portfolio comprised of two stocks plus a
risk-free security. Stock A has an expected return of 13.6 percent and
Stock B has an expected return of 14.7 percent. You want to own
$25,000 of Stock B. The risk-free rate is 3.6 percent and the expected
return on the market is 12.1 percent. If you want the portfolio to have
an expected return equal to that of the market, how much should you
invest in the risk-free security?
Seleccione una:
O a. $12,775
Qb. $13,315
O c. $13,550
O
d. $12,987
O e. $12,921
4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8170295b-4658-4740-8611-b9dc4f3633dc%2Fecb995a5-8966-47f4-90e2-adafc5ac15e3%2F2ahnj9g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You want to create a $72,000 portfolio comprised of two stocks plus a
risk-free security. Stock A has an expected return of 13.6 percent and
Stock B has an expected return of 14.7 percent. You want to own
$25,000 of Stock B. The risk-free rate is 3.6 percent and the expected
return on the market is 12.1 percent. If you want the portfolio to have
an expected return equal to that of the market, how much should you
invest in the risk-free security?
Seleccione una:
O a. $12,775
Qb. $13,315
O c. $13,550
O
d. $12,987
O e. $12,921
4
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