Question

Stocks have a 15% expected return and 25% risk bonds have a 8% expected return and 9% risk the expected return of ________.A portfolio comprised of 75% stocks and 25% bonds is _______

Answer 1

Answer: 13.25%

Explanation:

The expected portfolio return can be calculated as follows:

= (Expected return of stocks * Weight of stocks) + (Expected return of bonds * Weight of bonds)

= (15% * 75%) + (8% * 25%)

= 11.25% + 2%

= 13.25%