Question

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. What is the expected return on Bo's complete portfolio?

Answer 1

Answer:

The expected return on Bo's complete portfolio will be "10.32%".

Explanation:

The given question is incomplete. Please find attachment of the complete question.

According to the question, the given values are:

Port's expected return,

$R_p=12 \ percent$

T-bill's expected return,

$R_t=3.6 \ percent$

Port's weight,

$W_p=80 \ percent \ i.e.,\ 0.80$

T-bill's weight,

$W_t=20 \ percent \ i.e., \ 0.20$

Now,

The Bo's complete portfolio's expected return will be:

⇒  $W_p\times R_p+W_t\times R_t$

On substituting the given values, we get

⇒  $0.80\times 12 \ percent+0.20\times 3.6 \ percent$

⇒  $10.32 \ percent$

Note: percent = %