The broker divided Ms. Jones’ initial investment as follows... International Fund = $ 1200 Fixed Assets Fund = $ 200 and Company stock = $ 600
<u><em>Explanation</em></u>
Lets assume, investment in company stock is
As she decides that her investment in the International Fund should be twice her investment in company stock, so the investment in International fund will be
If we assume that the investment in Fixed Assets Fund is , then...
As the International Fund earns 4.5%, so the amount of earning
Fixed Assets Fund earns 2.6%, so the amount of earning
Now the company stock falls 0.2%, so the amount of loss
At the end of the first quarter, Ms Jones receives a statement indicating a return of $58 on her investment. So....
Now substituting equation (1) which is into equation (2), we will get...
Plugging the value of into equation (1)...
So, the investment in International Fund, dollar
Investment in Fixed Assets Fund is dollar and investment in company stock is dollar