Assume you want to construct a portfolio with a 14 percent return from the following two securities:
What percentage of your portfolio should be invested in Security 1?
A) 57%
B) 47%
C) 43%
D) 53%

Name: Assume you want to construct a portfolio with a 14 percent return from the following two securities: What percentage of your portfolio should be invested in Security 1? A) 57% B) 47% C) 43% D) 53%
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Question

Assume you want to construct a portfolio with a 14 percent return from the following two securities: 
What percentage of your portfolio should be invested in Security 1?
A) 57% 
B) 47% 
C) 43% 
D) 53%

Quizplus · Accepted Answer

Solution:
0.14 = X (0.16) + (1 - X)(0.125)
X = 0.43

Assume You Want to Construct a Portfolio with a 14