Determine an amount invested in stock

Reference no: EM1361898

A $100,000 dollars is available to invest in portfolio containing stock X. stock Y, and a risk-free asset. All of the money must be invested. The goal is to create a portfolio that has an expected return of 12.5 and that has only 60 % of the risk of the overall market. If X has an expected return of 31 % and a beta of 1.8, Y has an expected return of 20 % and a beta of 1.5, and the risk-free rate is 6 %, how much money should be invested in stock X.

Reference no: EM1361898

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