You have a 1000 portfolio which is invested in stocks a and


You have a $1,000 portfolio which is invested in stocks A and B plus a risk-free asset.

$400 is invested in stock A. Stock A has a beta of 1.3 and stock B has a beta of .7. How much needs to be invested in stock B if you want a portfolio beta of .90? Show Work.

a. $0

b. $268

c. $482

d. $543

e. $600

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Financial Management: You have a 1000 portfolio which is invested in stocks a and
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