A portfolio is invested 54 percent in Stock K and 46 percent in Bond L.The bond has an expected return of 6.85 percent.What is the expected rate of return on Stock K if the portfolio expected return is 10.25 percent?

Name: A portfolio is invested 54 percent in Stock K and 46 percent in Bond L.The bond has an expected return of 6.85 percent.What is the expected rate of return on Stock K if the portfolio expected return is 10.25 percent?
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Question

Quizplus · Accepted Answer

0.1025 = 0.54x + 0.46(0.0685)
x = 0.1315,or 13.15%

A Portfolio Is Invested 54 Percent in Stock K and 46