MATHEMATICS

a brokerage house offers three stock portfolios. portfolio a consists of 2 blocks of common stock and 1 municipal bond. portfolio ii consists of 4 blocks of common stock, 2 municipal bonds, and 3 blocks of preferred stock. portfolio iii consists of 7 blocks of common stock, 3 municipal bonds, and 3 blocks of preferred stock. a customer wants 21 blocks of common stock, 10 municipal bonds, and 9 blocks of preferred. stock. how many units of each portfolio should be offered?

  1. 👍
  2. 👎
  3. 👁
  1. x of portfolio 1
    y of portfolio 2
    z of portfolio 3
    portfolio 1: 2 common stock, 1 muni bond
    portfolio 2: 4 common stock, 2 muni bond, 3 preferred stock
    portfolio 3: 7 common stock, 3 muni bond, 3 preferred stock
    so
    common 21 = 2 x + 4 y + 7 z
    muni 10 = 1 x + 2 y + 3 z
    preferred 9 = 3 y + 3 z or 3 = y+z
    so
    z = (3-y)

    21 = 2x + 4 y + 7(3-y)
    10 = 1x + 2 y + 3(3-y)

    0 = 2 x - 3 y so x = 1.5 y
    10 = 1.5 y + 2 y + 9 - 3 y
    1 = .5 y
    y = 2
    go back and get x and z

    1. 👍
    2. 👎
  2. 4,6

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. investing

    You have a $ 2 million portfolio consisting of $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth one stock with a beta of 0.9 and using the proceeds to

  2. Investing ( pease help)

    You hold a diversified $ 100,000 portfolio consisting of 20 stocks with 5000 invested in each . The portfolio's beta is 1.12. You plan to sell a stock with b=0.90 and use the proceeds to buy a new stock with b=1.75. what will the

  3. finance 2 questions

    9. When Patricia sells her General Motors common stock at the same time that Brian purchases the same amount of General Motor's stock, General Motors receives: A. The spread between the bid and ask of the transaction B. The dollar

  4. Advanced Algebra

    HELP! WHICH IS THE HIGHEST RISK INVESTMENT? List the following stocks and bonds in order from highest default risk to lowest default risk: A municipal bond in a city with a population of 150,000 A common stock in a company under

  1. acc/291

    The following stockholders’ equity accounts arranged alphabetically are in the ledger of McGrath Corporation at December 31, 2011. Common Stock ($10 stated value) $1,500,000 Paid-in Capital from Treasury Stock 6,000 Paid-in

  2. ACC291

    The following stockholders' equity accounts arranged alphabetically are in the ledger of McGrath Corporation at December 31, 2011. Common Stock ($10 stated value) $1,500,000 Paid-in Capital from Treasury Stock 6,000 Paid-in

  3. business math

    #3 of case study: If Naomi invests in a stock portfolio, her returns for 10 or more years will average 10%-12%. Naomi realizes that the stock market has higher returns because it is a more risky investment than a savings account

  4. Investments

    An analyst gathers the following information about Meyer, Inc.: • Meyer has 1,300 shares of 8% cumulative preferred stock outstanding, with a par value of $240, and liquidation value of $250. • Meyer has 22,400 shares of

  1. Accounting PLEASE HELP!!!!!!!!!

    Reading Foods is interested in calculating its weighted average cost of capital (WACC). The company’s CFO has collected the following information: • The target capital structure consists of 40 percent debt and 60 percent

  2. principle of investment

    What is the expected return on a portfolio consisting of an equal amount invested in each stock? Stock Expected Return A 15% B 10 C 22 D 14 b.What is the expected return on the portfolio if 50 percent of the funds are invested in

  3. Finance

    You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. The one stock has a beta of .80. What does the beta of the second stock have to be if you want the portfolio risk to equal that of

  4. Finance

    Byron Corporation's target capital structure consists of 40% debt and 60% common equity. Assume that the firm has no retained earnings. The company's the last dividend (Do) was $2.00, which is expected to grow at a constant rate

You can view more similar questions or ask a new question.