How much money will you invest in stock x and y

Reference no: EM131481954

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

Questions Cloud

Write a function template named display : Write a function template named display() that displays the value of the single argument passed to it when the function is called.

How to represent a polynomial that is to be input : Implement a class of stacks by using a list to contain the stack's entries. Then write a program that adequately demonstrates your new class.

Explain how the declining problem of premature death : Most consumers have some knowledge and beliefs about a product they are considering purchasing. Explain how the “declining problem of premature death”

Discuss business and financial risks : Company: Bank of Nova Scotia from Canada Competitor:Royal Bank of Canada &Bank of Montreal.

How much money will you invest in stock x and y : You have $100,000 to invest in a portfolio containing StockX, StockY, and a riskfree asset. You must invest all of your money.

Determine the fixed rate on the swap : A corporation enters into a $X million notional principal interest rate swap. The swap calls for the corporation to pay a fixed rate and receive a floating.

The possibility of insolvency or significant loss of surplus : it has done in the past without opening itself up to the possibility of insolvency or a significant loss of surplus.”

Describe the advantages and disadvantages of taxable merger : Describe the advantages and disadvantages of a taxable merger as opposed to tax-free exchange. What is the basic determinant of tax status in a merger?

About a product they are considering purchasing : Most consumers have some knowledge and beliefs about a product they are considering purchasing.

User Account

All Pages