You Would Like to Combine a Risky Stock with a Beta

question 105

Multiple Choice

You would like to combine a risky stock with a beta of 1.68 with U.S.Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market.What percentage of the portfolio should be invested in the risky stock?

• A)32 percent
• B)40 percent
• C)54 percent
• D)60 percent
• E)68 percent

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