Finance Director of a large charity

As the Finance Director of a large charity, you have $1,000,000 to invest in two stocks:

Security

Beta

Expected Return

Andropov Holdings

1.75

0.168

Brezhnev Industries

0.89

0.109

Your investment goal is to create a portfolio from these two stocks with an expected return of 14%. How much will you invest in each stock? What is the Beta of the portfolio? With regards to risk as measured by Beta, how does this portfolio compare to the market portfolio?

Leave a Reply

Your email address will not be published.