You have $264,000 to invest in a stock portfolio. Your choices are Stock H, with

Question

You have $264,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 14.4 percent, and Stock L, with an expected return of 11.5 percent.

Required:
If your goal is to create a portfolio with an expected return of 12.70 percent, how much money will you invest in Stock H and in Stock L? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Investment in Stock H=$?
Investment in Stock L=$ ?

Explanation / Answer

let the Investment in Stock H = x 12.70 = 14.4*x/$264,000 + 11.5*($264,000 -x)/$264,000 3352800 = 14.4*x - 11.5x + 3036000 Investment in Stock H=$109241.38 Investment in Stock L=$154,758.62

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