Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Raghubhai
Transcribed Image Text:You have $116,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to
create a portfolio that has an expected return of 17.8 percent. Stock X has an expected
return of 13.4 percent and a beta of 1.30, and Stock Y has an expected return of 7.9
percent and a beta of .80.
a. How much money will you invest in Stock Y? (Do not round intermediate
calculations. A negative answer should be indicated by a minus sign.)
b. What is the beta of your portfolio? (Do not round intermediate calculations and
round your answer to 3 decimal places, e.g., 32.161.)
a. Investment in Stock Y
b. Portfolio beta
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