You have $10,000 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 7 percent.
Required:
(a) If your goal is to create a portfolio with an expected return of 11.2 percent, how much money will you invest in Stock X?
(b) If your goal is to create a portfolio with an expected return of 11.2 percent, how much money will you invest in Stock Y?