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

Multiple Choice

Suppose you have $4,000 to invest in Stocks X and Y.Stock X has an expected return of 13.5 percent and a beta of 1.2.Stock Y has an expected return of 18 percent 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