At the beginning of the month, you owned $6,400 of Company G, $8,800 of Company

Question

At the beginning of the month, you owned $6,400 of Company G, $8,800 of Company S, and $2,600 of Company N. The monthly returns for Company G, Company S, and Company N were 8.05 percent, -1.58 percent, and -.15 percent. What is your portfolio return?

At the beginning of the month, you owned $10,700 of Company G, $10,600 of Company S, and $16,200 of Company N. The monthly returns for Company G, Company S, and Company N were 9.8 percent, -1.31 percent, and 9.3 percent. What is your portfolio return? (Round intermediate calculations to 2 decimal places.)

Explanation / Answer

1.Total value=(6400+8800+2600)=$17800

Portfolio return=Respective returns*Respective investment weights

=(6400/17800*8.05)+(8800/17800*-1.58)+(2600/17800*-0.15)

=2.09%(Approx).

2.Total value=(10700+10600+16200)=$37500

Portfolio return=Respective returns*Respective investment weights

=(10700/37500*9.8)+(10600/37500*-1.31)+(16200/37500*9.3)

=6.44%(Approx).

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