Question

You own a portfolio that is invested 32 percent in Stock A, 43 percent in Stock B, and the remainder in Stock C. The expected returns on stocks A, B, and C are 11.5 percent, 15.2 percent, and 8.8 percent, respectively. What is the expected return on the portfolio

Answer 1

Answer:

12.42%

Explanation:

Stock  Weights(A)  Return (B)  Product (A*B)

A               32%           11.50%           3.68%

B               43%           15.20%          6.54%

C               25%           8.80%           2.20%

Portfolio Return                              12.42%

So, the expected return on the portfolio is 12.42%.