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Fofino [41]
3 years ago
14

Fremont Enterprises has an expected return of 18 % and Laurelhurst News has an expected return of 21 %. If you put 43 % of your

portfolio in Laurelhurst and 57 % in​ Fremont, what is the expected return of your​ portfolio? g
Business
1 answer:
Umnica [9.8K]3 years ago
4 0

Answer: 19.29%

Explanation:

From the question, Fremont Enterprises has an expected return of 18% and 57% of the portfolio is put in​ Fremont. The portfolio return of Fremont will be the expected return multiplied by the weight. This will be:

= 18% × 57%

= 18 × 0.57

= 10.26%

We are also told that Laurelhurst News has an expected return of 21% and that 43% of the portfolio is put in​ Laurelhurst News. The portfolio return here will be the expected return multiplied by the weight. This will be:

= 21% × 43%

= 21% × 0.43

= 9.03%

The the expected return of the portfolio will now be:

= 10.26% + 9.03%

= 19.29%

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