# You have 24,000 to invest in a portfolio containing X, Y and a risk free asset. You

## Question:

You have £24,000 to invest in a portfolio containing X, Y and a risk free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 8.5 per cent and that has only 70 per cent of the risk of the overall market.

If X has an expected return of 12 per cent and a beta of 1.5, Y has an expected return of 9 per cent and a beta of 1.2, and the risk-free rate is 3 per cent, how much money will you invest in X? How do you interpret your answer?

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**Related Book For**

## Corporate Finance

**ISBN:** 9780077173630

3rd Edition

**Authors:** David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe