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You have $12,000 to invest in a stock portfolio. Your choices are-(Answered)

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Question

You have $12,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 11 percent and Stock Y with an expected return of 8 percent. If your goal is to create a portfolio with an expected return of 9.59 percent, how much money will you invest in Stock X ? In Stock Y?


Let weight of Stock X = Wx

 

weight of Stock Y = (1-Wx)

 


 

Expected Return of Portfolio = Expected Return of Stock X * weight of Stock X +

 

Expected Return of Stock Y * weight of Stock Y

 

9.59% = 11%*Wx...

 

Paper#9208991 | Written in 27-Jul-2016

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