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Could use some Help on Question. Thank You.

You have $17,600 to invest and would like to create a portfolio with an expected return of 11.1 percent. You can invest in St

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Answer #1

Let investment in K=$x

Hence investment in L=(17600-x)

Portfolio return=Respective return*Respective investment weight

11.1=(x/17600*10.1)+(17600-x)/17600*13.7

(11.1*17600)=10.1x+241120-13.7x

195360=10.1x+241120-13.7x

x=(241120-195360)/(13.7-10.1)

=$12711.11(Approx)=investment in K(Approx).

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