Thread: Buying stocks with regard to transaction costs

Hi!

I asked about this problem in the business math forum but didn't find a solution. If nobody finds a solution here I will consider the problem impossible to solve

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I have 1,000,000 dollars invested as following:

10% in stock A
12% in stock B
5% in stock C
73% in stock D

But I want them to be invested as following:

10% in stock A
20% in stock B
40% in stock C
30% in stock D

What transactions should I make to exactly reach the wanted weights? The transaction cost is 1% of the size of the transactions so if I e.g. sell 430,000 dollars of stock D it will cost me 4300 dollars.

Ok - impossible to solve!