1. An investor wants to invest $20,000 in a portfolio of stocks and bonds. The stock portion of the portfolio is expected to return 12% annually, while the bond portion is expected to return 7% annually. The investor wants the portfolio to have a return of 10%. Calculate the percentage of the investment that should be allocated to stocks and bonds.

2. An investor has a portfolio consisting of two stocks, Stock A and Stock B. Stock A has an expected return of 15% and a standard deviation of 20%, while Stock B has an expected return of 12% and a standard deviation of 10%. Calculate the expected return and standard deviation of a portfolio consisting of 60% Stock A and 40% Stock B.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Allocation of Investment Let X be the p... View the full answer