You have $24,000 to invest in a stock portfolio. your choices are stock x with an expected return of 13 percent and stock y with an expected return of 12 percent. if your goal is to create a portfolio with an expected return of 12.65 percent, how much money will you invest in stock x and stock y? (do not round intermediate calculations and round your answer to the nearest dollar, e. g., 32.)

Investment in stock X is $15,600 and Investment in stock Y is $8,400

Explanation:

Assuming the weights of the Stock X and Stock Y be Q and R

So,

Q + R = 1

R = 1 - Q

(Q × 13%) + (R × 12%) = 12.65%

13 Q + [( 1- Q) × 12] = 12.65

13 Q - 12 Q + 12 = 12.65

Q = 12.65 - 12

Q = 0.65

R = 1 - Q

  = 1 - 0.65

  = 0.35 or 35%

Therefore, the investment in stock X and Y is as:

Investment in stock X = Amount × Percentage

                                    = $24,000 × 65%

                                    = $15,600

Investment in stock Y = Amount × Percentage

                                    = $24,000 × 35%

                                    = $8,400

answer; is usually (less than) the socially optimal level of consumption;