Proportion of portfolio


Stock A, average stock, has expected return of 10 percent. Stock B has beta of 2.0. Portfolio P is the two-stock portfolio, where part of portfolio is invested in Stock A and other part is invested in Stock B. Suppose that the risk-free rate is 5%. Portfolio P has an expected return of 12 percent. What proportion of Portfolio P consists of Stock B?

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Mathematics: Proportion of portfolio
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