You have $13,000 to invest in a stock portfolio. Your choices are Stock X with a

Question

You have $13,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12 percent and Stock Y with an expected return of 8.5 percent. If your goal is to create a portfolio with an expected return of 10.39 percent, how much money will you invest in Stock X and Stock Y?

You have $13,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12 percent and Stock Y with an expected return of 8.5 percent. If your goal is to create a portfolio with an expected return of 10.39 percent, how much money will you invest in Stock X and Stock Y?

Explanation / Answer

You have $13,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12 percent and Stock Y with an expected return of 8.5 percent. If your goal is to create a portfolio with an expected return of 10.39 percent, how much money will you invest in Stock X and Stock Y?

Let amount invested in X = x

amount invested in Y = 13000-x

x*12% + (13000-x)*8.5% = 13000*10.39%

x= 7020

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.