Answer:
The option c is a right answer.
Explanation:
For calculating the return on her portfolio, the steps is to be followed which is shown below:
Step 1: First compute the weight-age of each portfolio.
Step 2: Multiply the weight-age amount to invested return.
Step 3: After multiply the amounts, the expected return comes.
Mathematically,
Step 1: Weight-age is to be computed by
= Each Portfolio amount ÷ total stock amount
where total stock amount = $8,000 + $4,000 +$12,000
=$24,000
For A = $8,000 ÷ $24,000 = 0.3333
For B = $4000 ÷ $24,000 = 0.1666
For C = $12000 ÷ $24,000 = 0.50
Step 2:
Expected Return for A = Weight-age × invested return
= 0.3333 × 17.5%
= 5.83%
Expected Return for B = Weight-age × invested return
= 0.1666 × 11.0%
= 1.83%
Expected Return for C = Weight-age × invested return
= 0.50 × 4.30%
= 2.15%
So, the total return on her portfolio is a sum of Expected Return for A + Expected Return for B +Expected Return for C
= 5.83% + 1.83% + 2.15%
= 9.81 %
Hence, the return on her portfolio is 9.81% .
Therefore, the option c is a right answer
