The return on a portfolio that invests 40% in large-company stocks and 60% in lo

Question

The return on a portfolio that invests 40% in large-company stocks and 60% in long-term government bonds is _________ percent. The return on a portfolio that is equally invested in small-company stocks and Treasury bills is _________ percent. (Do not include the percent signs (%). Round your answers to 2 decimal places, (e.g., 32.16.))

The return on a portfolio that invests 40% in large-company stocks and 60% in long-term government bonds is _________ percent. The return on a portfolio that is equally invested in small-company stocks and Treasury bills is _________ percent. (Do not include the percent signs (%). Round your answers to 2 decimal places, (e.g., 32.16.))

Explanation / Answer

1) The return on a portfolio that invests 40% in large-company stocks and 60% in long-term government bonds is 8.42 percent.

Explanation= (.40 * 0.125) + (.60 * 0.057) = 8.42%

The return on a portfolio that is equally invested in small-company stocks and Treasury bills is 10.60 percent.

Explanation: (0.50 * 0.178) + (0.50 * .034) = 10.60 %

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