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How much should you invest in the risk-free security

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Reference no: EM132939156

Problem - You want to create an $80,000 portfolio comprised of two stocks plus a risk-free answered security. Stock A has an expected return of 9 percent and stock B has an expected out of return of 24 percent. You want to own $20,000 of stock B. The risk-free rate is 3 percent and the expected return on the market is 10 percent. If you want the portfolio question to have an expected return of 12 percent, how much should you invest in the risk-free security?

Reference no: EM132939156

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