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Portfolio Expected Return You have $\$ \mathbf{1 0 , 0 0 0}$ to invest in a stock portfolio. Your choices are stock $X$ with an expected return of 16 percent and stock $Y$ with an expected return of 10 percent. If your goal is to create a portfolio with an expected return of 12.9 percent, how much money will you invest in stock $X$ ? In stock $\boldsymbol{r}$ ?

   Portfolio Expected Return You have $\$ \mathbf{1 0 , 0 0 0}$ to invest in a stock portfolio. Your choices are stock $X$ with an expected return of 16 percent and stock $Y$ with an expected return of 10 percent. If your goal is to create a portfolio with an expected return of 12.9 percent, how much money will you invest in stock $X$ ? In stock $\boldsymbol{r}$ ?

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Corporate Finance

Corporate Finance

Stephen Ross,… 9th Edition

Chapter 11, Problem 4

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Expected return of the portfolio = (Weight of stock X * Expected return of stock X) + (Weight of stock Y * Expected return of stock Y) Let's assume the weight of stock X is $x$ and the weight of stock Y is $y$. Since the total amount to invest is $10,000, we can Show more…

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Portfolio Expected Return You have $\$ \mathbf{1 0 , 0 0 0}$ to invest in a stock portfolio. Your choices are stock $X$ with an expected return of 16 percent and stock $Y$ with an expected return of 10 percent. If your goal is to create a portfolio with an expected return of 12.9 percent, how much money will you invest in stock $X$ ? In stock $\boldsymbol{r}$ ?

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