Your friend's portfolio manager has suggested two high-yielding stocks: Consolidated Edison (ED) and Royal Bank of Scotland (RBS-K). ED shares cost $40, yield 5.5% in dividends, and have a risk index of 1.1 per share. RBS-K shares cost $25, yield 7.5% in dividends, and have a risk index of 1.4 per share. You have up to $24000 to invest and would like to earn at least $1320 in dividends. How many shares (to the nearest tenth of a unit) of each stock should you purchase in order to meet your requirements and minimize the total risk index for your portfolio?

Buy____ shares of ED and______ shares of RBS-K. The minimum total risk index is c = _____.

Answer rating: 100% (QA)

Lets assume shares to be purchased in ED is x and purchased in ... View the full answer