You would like to combine a risky stock with a beta of 1.8 with 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 Treasury bills?
A) 40%
B) 44%
C) 52%
D) 56%
E) 60%

Question

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The Answer of You would like to combine a risky stock with a beta of 1.8 with 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 Treasury bills?
A) 40%
B) 44%
C) 52%
D) 56%
E) 60%

You Would Like to Combine a Risky Stock with a Beta