You have $21,000 to invest in a stock portfolio. Your choices are Stock X with a

Question

You have $21,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 10 percent and Stock Y with an expected return of 12.5 percent. If your goal is to create a portfolio with an expected return of 10.95 percent, how much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations. Round your answer to the nearest dollar, e.g., 32.)

You have $21,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 10 percent and Stock Y with an expected return of 12.5 percent. If your goal is to create a portfolio with an expected return of 10.95 percent, how much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations. Round your answer to the nearest dollar, e.g., 32.)

Explanation / Answer

Answer:-

X+Y = $21,000

0.10 x*+0.125y = 2300(.1095*21000)

X = Y-21,000

0.10*(Y-21000)+O.125 Y = 2,300

0.10Y -2,100+0.125Y = 2,300

0.225 Y = 2300+2100

0.225Y = 4,400

Y =$19,556

X = 21,000 -19,556 = $1,444

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