home / study / questions and answers / business / finance / you have $13000 to invest in a stock po Show more home / study / questions and answers / business / finance / you have $13000 to invest in a stock portfolio. Your question has been answered! Rate it below. Let us know if you got a helpful answer. Question You have $13000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 9 percent. Assume your goal is to home / study / questions and answers / business / finance / you have $13000 to invest in a stock po Show more home / study / questions and answers / business / finance / you have $13000 to invest in a stock portfolio. Your question has been answered! Rate it below. Let us know if you got a helpful answer. Question You have $13000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 9 percent. Assume your goal is to create a portfolio with an expected return of 12.35 percent. Required: 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).) View comments (1) Expert Answer Anonymous answered this 1 hour later Was this answer helpful? 0 0 141 answers Answer: To earn an expected return of 12.35% we must invest as follows; Suppose we invest x% of $ 13000 in Stock X and (1-x)% of $ 13000 in Stock Y; then according to question 9% of 13000x + 15% of 13000 (1-x) = 12.35% of 13000 0.09 x 13000x + 0.15 x (13000 13000x) = 1605.50 1170x + 1950 1950x = 1605.50 x = 0.378205 or 37.8205% to be invested in Stock X and 1 x = 1 0.378205 = 0.621795 or 62.1795% to be invested in Stock Y Hide comments (1) Comments Anonymous posted 1 minute ago Edit Delete This was wrong per my homework. they have x =$7258.33 and Y= $5741.67 I am lost at the part of (13000- 13000x) Then 1950-1950x should that equal zero? I am so lost on this. Please explain futher Show lesst. Required: 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).) View comments (1) Expert Answer Anonymous answered this 1 hour later Was this answer helpful? 0 0 141 answers Answer: To earn an expected return of 12.35% we must invest as follows; Suppose we invest x% of $ 13000 in Stock X and (1-x)% of $ 13000 in Stock Y; then according to question 9% of 13000x + 15% of 13000 (1-x) = 12.35% of 13000 0.09 x 13000x + 0.15 x (13000 13000x) = 1605.50 1170x + 1950 1950x = 1605.50 x = 0.378205 or 37.8205% to be invested in Stock X and 1 x = 1 0.378205 = 0.621795 or 62.1795% to be invested in Stock Y Hide comments (1) Comments Anonymous posted 1 minute ago Edit Delete This was wrong per my homework. they have x =$7258.33 and Y= $5741.67 I am lost at the part of (13000- 13000x) Then 1950-1950x should that equal zero? I am so lost on this. Please explain futher Show less
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