You own a portfolio that has $1,800 invested in Stock A and $2,900 invested in S

Question

You own a portfolio that has $1,800 invested in Stock A and $2,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 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 $1,800 invested in Stock A and $2,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively.

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Expected Return on the Portfolio = (9*1800)/(1800 + 2900) + (15*2900)/(1800 + 2900) = 12.70%

Answer is 12.70%.

Thanks.

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