Dale martin
New member
You have searched the stock market and have found three stocks (“A”, “B”, “C”) to invest. You have $1 million and you want to split this investment between the three stocks and the T-Bills. The portfolio of the three stocks (“A”, “B” and “C”) and T-Bills will have the same level of risk as the market portfolio.
Assume that you invest $200,000 in “A” with a beta of 0.8 and $400,000 in “B” with a beta of 1.2. If “C” has a beta of 1.44, how much should you invest in “C” and in T-Bills?
Assume that you invest $200,000 in “A” with a beta of 0.8 and $400,000 in “B” with a beta of 1.2. If “C” has a beta of 1.44, how much should you invest in “C” and in T-Bills?