How much money will you invest in stock x and y

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Question: You have $100,000 to invest in a portfolio containing StockX, StockY, and a riskfree asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 13.5 percent and that has only 70 percent of the risk of the overall market. IfXhas an expected return of 31 percent and a beta of 1.8,Yhas an expected return of 20 percent and a beta of 1.3, and the risk-free rate is 7 percent, how much money will you invest in StockX &Y? How do you interpret your answer?

Reference no: EM131481954

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