Ask Question
8 April, 04:12

You have $22,000 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 13 percent. If your goal is to create a portfolio with an expected return of 11.74 percent, how much money will you invest in Stock X? In Stock Y?

+5
Answers (1)
  1. 8 April, 04:35
    0
    The answer is "$ 8.140".

    Explanation:

    The two stock portfolio formula is as follows:

    Return portfolio = weightage 1 * Return expected 1 + weightage 2 * Return expected 2

    weightage 2 = 1-weightage 1 Return portfolio = weightage 1 * Return expected 1 + (1-weightage 1) * Return expected b

    Replacement of data and resolution of fo weigtage 1,

    11.74% = weights of 1 * 11% + (1-weights of 1) * 13%

    weights of 1 * 2% = 13% - 11.74% = 1.26%

    Weightage Stock 1 = 0.63

    weightage 2 = 1-weightage 1 = 0.37

    In 22,000 dollars, 63% invest in stocks X $13.860 and 37% in 8.140 dollars.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You have $22,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 11 percent and Stock Y with an ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers