Analyzing a Portfolio You have $100,000 to invest in a portfolio containing stock X, stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10.7 percent and that has only 80 percent of the risk of the overall market. If X has an expected return of 17.2 percent and a beta of 1.8, Y has an expected return of 8.75 percent and a beta of .5, and the risk-free rate is 7 percent, how much money will you invest in stock X? How do you interpret your answer?
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