The ordering of the portfolios, from best to worst, based on their weighted average ror is given as follows:
Portfolio 2, Portfolio 3, Portfolio 1.
<h3>How to obtain the weighted average rate of return?</h3>
The ROR is obtained by the division operation presented as follows:
ROR = (Sum of percentage x Return)/(Total investment).
For Portfolio 1, the metrics are given as follows:
- Total investment: 850 + 2425 + 280 + 1400 + 2330 = $7,285.
- Sum: 0.046 x 850 + 0.021 x 2425 + 0.138 x 280 - 0.065 x 1400 + 0.015 x 2330 = $72.615.
Hence the rate of return is given as follows:
ROR = 72.615/7285 = 0.01 = 1%.
For Portfolio 2, the metrics are given as follows:
- Total investment: 1050 + 1950 + 1295 + 745 + 1050 = $6,090.
- Sum: 0.046 x 1050 + 0.021 x 1950 + 0.138 x 1295 - 0.065 x 745 + 0.015 x 1050 = $235.29.
Hence the rate of return is given as follows:
ROR = 235.29/6090 = 0.04 = 4%.
For Portfolio 3, the metrics are given as follows:
- Total investment: 1175 + 550 + 860 + 550 + 2000 = $5,135.
- Sum: 0.046 x 1175 + 0.021 x 550 + 0.138 x 860 - 0.065 x 550 + 0.015 x 2000 = $178.53.
Hence the rate of return is given as follows:
ROR = 178.53/5135 = 0.035 = 3.5%.
Hence the rank from best to worst is given as follows:
Portfolio 2, Portfolio 3, Portfolio 1.
More can be learned about the weighted average rate of return at brainly.com/question/28718016
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