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You have $252,498 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.99 percent, and Stock L, with an expected return of 11.01 percent. Legal constraints require you to invest at least $51,548 in stock L. If your goal is to create a portfolio with an expected return of 21.13 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 3.59 percent to achieve your goal? Answer in $ to two decimals.

You have $252,498 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.99 percent, and Stock L, with an expected return of 11.01 percent. Legal constraints require you to invest at least $51,548 in stock L. If your goal is to create a portfolio with an expected return of 21.13 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 3.59 percent to achieve your goal? Answer in $ to two decimals.

Intermediate Algebra
Intermediate Algebra
19th Edition
ISBN:9780998625720
Author:Lynn Marecek
Publisher:Lynn Marecek
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...
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You have $252,498 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.99 percent, and Stock L, with an expected return of 11.01 percent. Legal constraints require you to invest at least $51,548 in stock L. If your goal is to create a portfolio with an expected return of 21.13 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 3.59 percent to achieve your goal? Answer in $ to two decimals.
Transcribed Image Text:You have $252,498 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.99 percent, and Stock L, with an expected return of 11.01 percent. Legal constraints require you to invest at least $51,548 in stock L. If your goal is to create a portfolio with an expected return of 21.13 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 3.59 percent to achieve your goal? Answer in $ to two decimals.
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