You own a portfolio that has $2,900 invested in Stock A and $4,000 invested in S

Question

You own a portfolio that has $2,900 invested in Stock A and $4,000 invested in Stock B. Assume the expected returns on these stocks are 8 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 has $2,900 invested in Stock A and $4,000 invested in Stock B. Assume the expected returns on these stocks are 8 percent and 14 percent, respectively.

Explanation / Answer

Total return = 0.08*2900 + 0.14*4000 = 792.

Hence rate of return on the portfolio = 792/(2900+4000) = 0.1148 = 11.48%

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