4 You want to create a portfolio equally as risky as the mar

4 You want to create a portfolio equally as risky as the market, and you have $1,100,000 to invest. Given this information, fill in the rest of the following table: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g, 32.16.) Asse Stock A Stock B Stock C Risk-free asset $ 20 110,880 1.10 264,80e 1.20 1.40

Solution

1100k*1 = 110k*1.1 + 264k*1.2 + investment*1.4

investment in C = 473k

investment in C = 473,000

Investment in risk free asset = 1100k - 110k - 264k - 473k = 253,000

beta of a risk free asset is 0