math/stock
posted by brandon .
You want to create a $75,000 portfolio comprised of two stocks plus a riskfree security. Stock A has an expected return of 13.6 percent and stock B has an expected return of 11.4 percent. You want to own $30,000 of stock B. The riskfree rate is 4 percent and the expected return on the market is 10 percent. If you want the portfolio to have an expected return equal to that of the market, how much should you invest in the riskfree security?
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