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Math Help - Buying stocks with regard to transaction costs

  1. #1
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    Joined
    Oct 2008
    Posts
    9

    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.
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  2. #2
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    Joined
    Oct 2008
    Posts
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    Ok - impossible to solve!
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