Homework Answers
a) Number of stocks available = 20
Number of stocks to be chosen = 6
Number of portfolios available = 20C6
= 20!/(6! x (20-6)!)
= 38,760
b) Number of balanced portfolos = Number of ways in which 2 high risk stocks can be selected x Number of ways in which 2 moderate risk stocks can be selected c Number of ways in which 2 low risk stocks can be selected
= 7C2 x 5C2 x 8C2
= 21 x 10 x 28
= 5,880
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