You made some unfortunate investment decisions. You invested a total of $6,000 in three funds:...

Question:

You made some unfortunate investment decisions. You invested a total of $6,000 in three funds: CHPX( Year-to-date loss: 4%), DYRX (Year-to-date loss: 3%), and EFFX (Year-to-date loss: 6%). Your investment included equal amount in CHPX and DYRX, and your year-to-date losses total $260.

How much did you invest in each of the three funds?

Average rates

When we invest in more than 1 investments then in order to arrive at the average rate we need to have weighted averages for the investments,

Answer and Explanation:

Since the amount invested in CHPX and DYRX is equal earning a loss of 4% and 3% respectively we can say that we had a loss of -3.5% on the combined investment of both the stocks.

A total loss of $260 on a $6,000 is around 4.33%

So the combination of above 2 investment and EFFX (Year-to-date loss: 6%) will together fetch a loss of 4.33%

Let the investment which fetched a loss of 3.5% be X and investment which fetched a loss of 6% be Y

So 0.035X + 0.06Y = 260 ---- equation 1

X + Y = 6000

X = 6,000 - Y

using this in equation 1

0.035 (6,000 - Y) + 0.06Y = 260

Y = 2000, X = 4000

so the amount invested in all three funds is 2,000


Learn more about this topic:

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Finding Constant and Average Rates

from ELM: CSU Math Study Guide

Chapter 11 / Lesson 9
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