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You want to create a portfolio equally as risky as the market, and you have $500,000...

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $ 85,000 .80 Stock B $165,000 1.15 Stock C 1.40 Risk-free asset a. How much will you invest in Stock C? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you invest in the risk-free asset? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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Answer #1

Investment in stock B =$175000

Investment in risk free asset =$75000.

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