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An investor has invested in three stocks: Stock 1 , Stock 1 , and Stock L . Let x , y , and z represent
An investor has invested in three stocks: Stock Stock and Stock L Let x y and z represent the percentages of the total investment in each stock, respectively. The investor has the following constraints: The total investment adds up to Stock X has an expected return of per annum, Stock Y has an expected return of per annum, and Stock Z has an expected return of per annum. The investor wants to allocate twice as much in Stock Z as in Stock X The investment in Stock Y should be of the total investment.a Construct the system of linear equations representing the above constraints.b Determine, using matrix algebra, the percentages of the total investment allocated to each stock that maximize the expected return.
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