Question
I know the answer to this question is 0.09 but the problem is that I need to know, how to derive to that answer. Please
I know the answer to this question is 0.09 but the problem is that I need to know, how to derive to that answer. Please provide all the steps...
In order to fund her retirement, Michele requires a portfolio with an expected return of 0.10 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock 3. If Stocks 1 and 2 have expected returns of 0.09 and 0.11 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Michele to achieve her investment requirement?
Use this formula:E(R3assetport) =x1E(R1)+ x2E(R2)+x3E(R3)
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