Final answer:
Without the expected returns of Stock X and Y, it is impossible to determine the specific amount Adrienne should invest in Stock X to achieve the desired portfolio return of 20%. More information is needed on the individual stock returns.
Step-by-step explanation:
Adrienne is looking to invest her $1,000 in a portfolio consisting of T-Bills, with an expected return of 3%, and two stocks, X and Y. The T-Bills have no risk (standard deviation of 0%), but she wishes to achieve an overall expected return of 20%. To calculate how much money she should invest in Stock X, we need to know the expected return for that stock and Stock Y, which is not provided in the question. In this case, it's not possible to ascertain the exact amount she needs to invest in Stock X without additional information.
Generally speaking, the higher the expected return of a stock, the higher the risk (standard deviation), and vice versa. If Stock X and Y have different expected returns and levels of risk, Adrienne would need to balance her investment to achieve the desired portfolio expected return of 20% while minimizing risk.
If the expected returns for Stock X and Y had been provided, we could have used the formula for a two-asset portfolio to find the appropriate investment weights for each stock that would achieve the target portfolio expected return.