You own a portfolio that has $1,720 invested in Stock A and $3,470 invested in Stock B. The expected returns on these stocks are

Question

2 years ago

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13.7 percent and 8.0 percent, respectively. What is the expected return on the portfolio

1 answer:

Blababa [14] · Answer 1 · 2023-04-04T05:51:07+03:00

The expected return is 9.8% on the portf

<h3>What is the Expected return?</h3>

The expected return is the amount of profit or loss an investor can anticipate receiving on an investment.

Calculation of expected return of Portfolio:

Stock A = $1,720 Expected return on Stock A is 13.7% =1,720 x 13.7% =$235.64

Stock B = $3,470 Expected return on Stock B is 8% = 3,470 x 8% =$277.6

Expected portfolio return = returns on each stock divided by incesting value.

Total return of each stock = $235.64 + $277.6 = $513.2

Total Invested value = $1,720 + $3,470 = $5,190

Expected portfolio return = $513.2 divide by $5,190 =9.8%

Thus, the expected return on the portfolio is 9.8%.

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