I want to create a portfolio equally risky as the market, and I have $1,000,000 to invest. So Given the info below, I need to fill the table below;

Asset Investment Beta
Stock A $200,000 .80
Stock B $250,000 1.30
Stock C 1.50
Risk-free asset

I know that the Investment for stock C = $343,333 and the Risk Free asset is $206,667.
I am trying to figure how to solve this problem.

Hope this helps thanks.

Solution Preview

The market beta is, by definition, 1.0. The risk-free asset has a beta of 0.00 by definition. To find the weighted-average beta of a portfolio, we multiply the beta of each investment by the amount of that investment. Thus,

(Total portfolio*portfolio beta)=(investment in Stock A*beta of ...

Solution Summary

I want to create a portfolio equally risky as the market, and I have $1,000,000 to invest. So given the info below, I need to fill the table below;

Asset Investment Beta
Stock A $200,000 .80
Stock B $250,000 1.30
Stock C 1.50
Risk-free asset

Security expected returns and betas
Security E(R) Beta
1 10% 1.00
2 12% 1.20
3 13% 1.10
Suppose there are three well-diversified portfolios, as shown above. An arbitrage opportunity is implied in these numbers. Show mathematically how to take advantage of it.

A stock portfolio invested 35% in Stock Q, 25% in Stock R, 30% in Stock S, and 10% in Stock T. The betas for these 4 stocks are .84, 1.17, 1.11 and 1.36 respectively. What is the portfolio beta?
Please show work in Excel.

Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio beta is equal to 1.12. Now, suppose you have decided to sell one of the stocks in your portfolio with a beta equal to 1.0 for $7,500 and to use these proceeds to buy another stock for your portfolio.

Assume that two securities A and B constitute the market portfolio. Their proportions and variance are 0.39, 160 and 0.61, 340, respectively. The covariance of the two securities is 190. Calculate the betas of the two securities.

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1. You are given the following information on two securities, the market portfolio, and the risk free rate:
(See attached file for full problem description with chart)
For parts a, b, and c, use the above Table.
a. Draw the Security Market Line.
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Year Stock X Stock Y Market
2006 14% 13% 12%
2007 19% 7% 10%
2008 -16% -5% -12%
2009 3% 1% 1%
2010 2

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Please assist with the following:
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