Invest in a portfolio containing stock

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You have $130,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 14 percent and that has only 77 percent of the risk of the overall market. If X has an expected return of 28 percent and a beta of 1.4, Y has an expected return of 22 percent and a beta of 1.6, and the risk-free rate is 8 percent, how much money will you invest in Stock Y?

Reference no: EM13911794

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