You own a portfolio that is 16 percent invested in Stock X, 31 percent in Stock

Question

You own a portfolio that is 16 percent invested in Stock X, 31 percent in Stock Y, and 53 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively.

What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

You own a portfolio that is 16 percent invested in Stock X, 31 percent in Stock Y, and 53 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively.

Explanation / Answer

Expected return on the portfolio = (0.16*0.09) + (0.31*0.12) +( 0.53*0.14)

Expected return on the portfolio = 0.1258 = 12.58%

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