P12-18 Tim's portfolio contains two stocks, Lightco and Shineco. Last year his portfolio returned 14 percent. Lightco's return was 5 percent and Shineco returned 20 percent. What are the weights of each in Tim's portfolio?
The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio, and Brightco's weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent, and Brightco loses 5 percent. What was the return on his portfolio?
Click here for the SOLUTION