You have a portfolio consisting solely of stock A and stock B. The portfolio has an expected return of 8.7 percent. Stock A has an expected return of 11.4 percent while stock B is expected to return 6.4 percent. What is the portfolio weight of stock A?
A) 39 percent
B) 46 percent
C) 54 percent
D) 61 percent
E) 67 percent

Question

Quizplus · Accepted Answer

0.087 = [0.114 x] + [0.064 (1 - x)]; x = 46 percent

You Have a Portfolio Consisting Solely of Stock a and Stock