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likoan [24]
2 years ago
10

You own a portfolio that is 23 percent invested in Stock X, 38 percent in Stock Y, and 39 percent in Stock Z. The expected retur

ns on these three stocks are 11 percent, 14 percent, and 16 percent, respectively. What is the expected return on the portfolio
Business
1 answer:
Finger [1]2 years ago
7 0

Answer:

The expected return on the portfolio is <u>14.09%</u>.

Explanation:

Expected return on a portfolio refers to addition of the mu;ti[licatiom of weight in the portfolio and expected return of all the investment in the same portfolio.

Therefore, the expected return on this portfolio can be calculated using the following formula:

PER = (rX * wX) + (rY * wY) + (rZ * wZ) ....................... (1)

Where,

PER = Portfolio expected return = ?

rX = Expected returns on stock X = 11%

wX = Weight of amount invested in stock X = 23%

rY = Expected returns on stock Y = 14%

wY = Weight of amount invested in stock Y = 38%

rZ = Expected returns on stock Z = 16%

wZ = Weight of amount invested in stock Z = 39%

Substituting the values into equation (1), we have:

PER = (11% * 23%) + (14% * 38%) + (16% * 39%) = 14.09%

Therefore, the expected return on the portfolio is <u>14.09%</u>.

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Answer:

c. Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

Explanation:

Globalization of markets occurs when different markets in the world are integrated and merged into just one market when similar tastes, preferences, norms, convenience and values are identified which facilitate a gradual change in culture towards the use of similar commodities.

The the sale of the same pillows worldwide by the U.S.-based pillow company, Fluffy Pillows, is a good example of globalization of markets .This is because the company has been able to integrate and merger all the pillow markets in the world to just one and has therefore facilitated a gradual change in tastes and preferences for its pillow making the use of the same pillow possible worldwide.

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xxTIMURxx [149]

Answer:

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