You have $12,000 to invest in a stock portfolio. Your choices are Stock X with a

Question

You have $12,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14 percent and Stock Y with an expected return of 10 percent. Assume your goal is to create a portfolio with an expected return of 12.30 percent.

How much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations.Round your answers to 2 decimal places (e.g., 32.16).)

You have $12,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14 percent and Stock Y with an expected return of 10 percent. Assume your goal is to create a portfolio with an expected return of 12.30 percent.

Explanation / Answer

X + Y = 12,000
X x 0.14 + Y x 0.10 = 1476
X = 12000- Y

(12000 - Y ) x 0.14 + (.10Y) = 1476
1680-0.14Y + .10Y = 1476
204 - 0.04Y = 0
Y = $5100

X=$6900

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