Question

You want to create a portfolio equally as risky as the market, and you have $1,100,000...

You want to create a portfolio equally as risky as the market, and you have $1,100,000 to invest. Consider the following information:

   

Asset Investment Beta
Stock A $165,000 0.70
Stock B $275,000 1.20
Stock C 1.55
Risk-free asset

   

Required:
(a) What is the investment in Stock C? (Do not round your intermediate calculations.)

A) $401,145

B) $405,368

C) $422,258

D) $268,876

E) $439,148

  

(b) What is the investment in risk-free asset? (Do not round your intermediate calculations.)

A) $391,124

B) $228,232
C) $247,252

D) $225,855

E) $237,742

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