You own a portfolio that is 20 percent invested in Stock X, 35 percent in Stock

Question

You own a portfolio that is 20 percent invested in Stock X, 35 percent in Stock Y, and 45 percent in Stock Z. The expected returns on these three stocks are 8 percent, 11 percent, and 13 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).)

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).)

Explanation / Answer

ER = 0.2*0.08 + 0.35*0.11 + 0.45*0.13 = 0.113 = 11.3%

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