A Portfolio Has an Expected Return of 12

question 41

Multiple Choice

A portfolio has an expected return of 12.3 percent. This portfolio contains two stocks and one risk-free security. The expected return on stock X is 9.7 percent and on stock Y it is 17.7 percent. The risk-free rate is 3.8 percent. The portfolio value is $78,000 of which $18,000 is the risk-free security. How much is invested in stock X?

• A) $18,600
• B) $19,667
• C) $21,375
• D) $22,204
• E) $24,800

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