Question: A portfolio has an expected return of 10.6 percent. This portfolio contains two stocks and one risk-free security. The expected return on stock X is

A portfolio has an expected return of 10.6 percent. This portfolio contains two stocks and one risk-free security. The expected return on stock X is 8.6 percent and on stock Y it is 23 percent. The risk-free rate is 4.4 percent. The portfolio value is $80,000 of which $25,000 is the risk-free security. How much is invested in stock X?
a. $0 b. $7,281.18 c. $27,411.16 d. $36,597.22 e. $40,009.13

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