Wes asked in Business & FinanceInvesting · 4 weeks ago

A broker recommends 12 stocks to a client. If the client will invest in 5 stocks, how many different 3 stock portfolios can be selected?

1 Answer

Relevance
  • 4 weeks ago

    Assuming

    (1) The client limits his selections to the stocks that the broker recommended

    (2) The client has sufficient funds to invest to choose any of the 12 stocks

    (3) The phrase "If the client will invest in 5 stocks" is irrelevant and consequently is ignored

    (4) You consider portfolios with the same stocks to be the same even if the number of shares of each stock is different

    then the answer is 12 x 11 x 10 = 1,320.

    If you do not make those assumptions there is no way to calculate an answer.

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