Ethanol is soluble in water because the polarity of its hydroxyl group is stronger than the nonpolarity of its two carbon chain. In alcohols with more than five carbons in their chain, the repulsive forces between the nonpolar chain and polar water do not allow the two to mix, according to Solubility of Things.
Ethanol and water mix at any ratio. Reagent grade ethanol is 95 percent ethanol and five percent water. Beer is two to 12 percent alcohol with the remainder being primarily water. Scientists describe two compounds soluble at any percentage like this as being miscible.
Butanol, or C4H6OH, has a maximum solubility of 11 moles/100 grams at one atmosphere pressure and 25 degrees Celsius. Pentanol, or C5H110H, is practically insoluble at only 0.03 moles per 100 grams of water. The same trend occurs in other types of organic compounds, where a longer chain indicates the material is immiscible with water. Acetic acid, with a three carbon chain is miscible, while valeric acid with a four carbon chain is not.
When mixing an organic compound that is not soluble in water, shaking the two together in a container forms a cloudy solution, unless the two liquids have a similar index of refraction. Upon sitting undisturbed, two layers form with the heavier material on the bottom and the lighter floating on top.