You Want Your Portfolio Beta to Be 0

question 72

Multiple Choice

You want your portfolio beta to be 0.95. Currently, your portfolio consists of $4,000 invested in stock A with a beta of 1.47 and $3,000 in stock B with a beta of 0.54. You have another $9,000 to invest and want to divide it between an asset with a beta of 1.74 and a risk-free asset. How much should you invest in the risk-free asset?

• A)$4,316.08
• B)$4,425.29
• C)$4,902.29
• D)$4,574.71
• E)$4,683.92