Multiple Choice
You desire a portfolio beta of 1.1.Currently,your portfolio consists of $100 invested in Stock A with a beta of 1.4 and $300 in Stock B with a beta of .6.You have another $400 to invest and want to divide it between Stock C with a beta of 1.6 and a risk-free asset.How much should you invest in the risk-free asset to obtain your desired beta?
A) $50
B) $100
C) $125
D) $350
E) $300
Correct Answer:
Verified
Correct Answer:
Verified
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