You have a portfolio consisting solely of stock A and stock B.The portfolio has an expected return of 9.8 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) 59 percent
B) 68 percent
C) 74 percent
D) 81 percent
E) 87 percent

Question

Quizplus · Accepted Answer

0.098 = [0.114 x] + [0.064 (1 - x)]; x = 68 percent

You Have a Portfolio Consisting Solely of Stock a and Stock