You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is
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Question:
You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create portfolio that has an expected return of 12.7 percent. If Stock X has an expected return of 11.4 percent and a beta of 1.25 and stock Y has an expected return of 8.68 percent and a beta of .85, how much money will you invest in Stock Y? How do you interpret your answer? What is the beta of your portfolio?
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