You have $19,000 to invest in a stock portfolio. Your choices are Stock X with a

Question

You have $19,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 12 percent. Assume your goal is to create a portfolio with an expected return of 13.25 percent.

How much money will you invest in Stock X and Stock Y?

You have $19,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 12 percent. Assume your goal is to create a portfolio with an expected return of 13.25 percent.

Explanation / Answer

19000*13.25 = x*15 + (19000-x)*12
=> x = 7916.67
y = (19000-x) = 11083.33

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