Question

What will be the expected return if the individual reduces the holdings of the AT&T stock to 15 percent and puts the funds into real estate investments?

Answer 1

Answer:

the expected return is 10.9%

Explanation:

The computation of the expected return is shown below:

= expected return × weightage

= 0.16 × 0.35  + 0.15 ×  0.10 + 0.12 ×  0.15 +  0.05 × 0.40

= 0.056 +  0.015  + 0.018 + 0.020

= 10.9%

Hence, the expected return is 10.9%

We simply applied the above formula so that the correct value could come

And, the same is to be considered