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Suppose You Have $4,000 to Invest in Stocks X and Y.Stock

Question 43

Multiple Choice

Suppose you have $4,000 to invest in Stocks X and Y.Stock X has an expected return of 13.5% and a beta of 1.2.Stock Y has an expected return of 18% and a beta of 2.How much should you invest in Stock X if you wish to have a portfolio beta of 1.8?


A) $1,000
B) $1,750
C) $2,250
D) $2,500

Correct Answer:

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