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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Definitions:

Four Side Rails

A safety feature used on hospital beds involving rails on all four sides to prevent the patient from accidentally falling out of bed.

Falls

Accidental descents to the ground, which can cause injury, especially significant in older adults due to higher vulnerability.

Side Rails Down

The lowering of protective rails on a hospital bed to facilitate patient transfer or make the bed more accessible.

Continuous Seizure Activity

Prolonged seizure episodes without recovery between them, also known as status epilepticus.