type the correct answer in the box. use numerals instead of words. harvey invested $50,000 to create a…

type the correct answer in the box. use numerals instead of words. harvey invested $50,000 to create a portfolio containing 70% stocks and 30% bonds. over the course of a year, the value of his stocks increased to 74% and the value of his bonds decreased to 26%. the value of his investment, after a year, is $57,900. what amount should harvey move from stocks and reinvest in bonds to rebalance his portfolio? to rebalance his portfolio to 70% stocks and 30% bonds, harvey should move $ from stocks into bonds.

type the correct answer in the box. use numerals instead of words. harvey invested $50,000 to create a portfolio containing 70% stocks and 30% bonds. over the course of a year, the value of his stocks increased to 74% and the value of his bonds decreased to 26%. the value of his investment, after a year, is $57,900. what amount should harvey move from stocks and reinvest in bonds to rebalance his portfolio? to rebalance his portfolio to 70% stocks and 30% bonds, harvey should move $ from stocks into bonds.

Answer

Explanation:

Step1: Calculate the current value of stocks and bonds

The value of the investment after a year is $V = 57900$. The current value of stocks is $0.74\times57900=42846$. The current value of bonds is $0.26\times57900 = 15054$.

Step2: Calculate the target - value of stocks and bonds for re - balancing

The target value of stocks for a 70% - 30% portfolio of value $57900$ is $0.7\times57900=40530$. The target value of bonds for a 70% - 30% portfolio of value $57900$ is $0.3\times57900 = 17370$.

Step3: Calculate the amount to move from stocks to bonds

The amount to move from stocks to bonds is the difference between the current value of stocks and the target value of stocks. Let $x$ be the amount to move. So $x=42846 - 40530=2316$.

Answer:

$2316$