You have $265,000 to invest in a stock portfolio. Your choices are Stock H, with

Question

You have $265,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 14 percent, and Stock L, with an expected return of 11.6 percent.

If your goal is to create a portfolio with an expected return of 12.75 percent, how much money will you invest in Stock H and in Stock L? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

You have $265,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 14 percent, and Stock L, with an expected return of 11.6 percent.

Explanation / Answer

The answer above is wrong. If you use the numbers he gives, you come up with 12.752%, which is not correct. Here is the correct answer:

Let H = your investment in Stock H

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