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How much should you invest in the risk-free asset

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Question - You want your portfolio beta to be 0.4. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400 to invest and want to divide it between an asset with a beta of 1.6 and a risk-free asset. How much should you invest in the risk-free asset?

Reference no: EM133076804

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