Question
A portfolio has an expected return of 13.4 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 13.4 percent. This portfolio contains two stocks and one risk-free security. The expected return on Stock X is 12.2 percent and on Stock Y it is 19.3 percent. The risk-free rate is 4.1 percent. The portfolio value is $48,000 of which $10,000 is the risk-free security. How much is invested in Stock X?
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International Financial Management
Authors: Geert Bekaert, Robert Hodrick
3rd edition
1107111820, 110711182X, 978-1107111820
