Question

Year-to-date, Yum Brands had earned a 4.40 percent return. During the same time period, Raytheon earned 4.93 percent and Coca-Cola earned −0.60 percent.If you have a portfolio made up of 40 percent Yum Brands, 40 percent Raytheon, and 20 percent Coca-Cola, what is your portfolio return?

Answer 1

Answer:

3.612%

Explanation:

The computation of portfolio return is shown below:-

Portfolio return = (Return of Y × Weight of Y) + (Return of R × Weight of R)

+ (Return of C × Weight of C)

= (4.40% × 40%) + (4.93% × 40%) + (-0.60% × 40%)

= 1.76% + 1.972% - 0.12%

= 3.612%

Therefore for computing the portfolio return we simply applied the above formula.