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You Want Your Portfolio Beta to Be 1

Question 54

Multiple Choice

You want your portfolio beta to be 1.3.Currently,the portfolio consists of $100 invested in stock A with a beta of 1.5 and $300 in stock B with a beta of .8.You have another $400 to invest and want to divide it between an asset with a beta of 1.7 and a risk-free asset.How much should you invest in the risk-free asset?


A) $17.65
B) $50.25
C) $200.15
D) $382.35
E) $400.00

Correct Answer:

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