Let investment in C=$x
Hence investment in risk free asset=1,100,000-(220,000+330,000+x)=$(550,000-x)
Portfolio beta=Respective beta*Respective investment weight
1=(220,000/1,100,000*0.7)+(330,000/1,100,000*1.25)+(x/1,100,000*1.55)+(550,000-x)/1,100,000*0[Beta of market=1;Beta of risk-free assets=0]
1=0.515+(x/1,100,000*1.55)
x=(1-0.515)*1,100,000/1.55
=$344193.55(Approx)=investment in C
Hence investment in risk free asset=$(550,000-x)
=$205806.45(Approx).
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