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sweet-ann [11.9K]
2 years ago
9

You have $10,000 to invest - $3,500 in Company A, the remaining amount in Company B. The expected returns for these stocks are 2

0% and 15%, respectively. The expected return on your portfolio is:
Business
1 answer:
mihalych1998 [28]2 years ago
6 0

Answer:

The expected return on the portfolio is:

16.75%

Explanation:

a) Data and Calculations:

                                Company A      Company B      Total

Investment                  $3,500              $6,500      $10,000

Expected returns          20%                    15%

Expected returns ($)   $700                $975         $1,675

Expected return on

portfolio = $1,675/$10,000 * 100 = $16.75%

b) The expected return on the portfolio is calculated as the returns on the portfolio in dollars divided by the total investment in the two companies, multiplied by 100.  This gives a value in percentage terms.

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i= 8% annual compunded

Explanation:

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