Originally Posted by

**scalpmaster** You have 2 bags of beans containing 10 beans each. In each bag, there 3 magic beans. How do you maximize the number of magic beans selected if you are allowed to pick 10 beans out of the 20 altogether? You can mix them if you want but the 10 has to be selected simultaneously not one at the time...

i.e. If you do not mix the bags and just pick any one bag, you know you will get a minimum of 3 magic beans out of 10 but can you achieve more?

This portfolio managment problem is related to picking the best 3 performing stocks from 2 different sectors. The problem is you won't know which 6 will perform best until end of the year but you are allowed to pick 10 from 20 and you want the portfolio to include as close to all 6 best as possible. Is there a way to optimize the selection process?

i.e. You can't draw one at a time to see if it is normal or not and then pick another from the other bag because you will only know whether it is a good stock at the end of the year.