You own a portfolio that is 30 percent invested in Stock X, 25 percent in Stock

Question

You own a portfolio that is 30 percent invested in Stock X, 25 percent in Stock Y, and 45 percent in Stock Z. The expected returns on these three stocks are 9 percent, 18 percent, and 14 percent, respectively. What is the expected return on the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

You own a portfolio that is 30 percent invested in Stock X, 25 percent in Stock Y, and 45 percent in Stock Z. The expected returns on these three stocks are 9 percent, 18 percent, and 14 percent, respectively. What is the expected return on the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Portfolio returns = R1W1 + R2W2 + R3W3

Where W is weight of stock in the portfolio and R is expected return from that stock

= (0.3*9%) + (0.25*18%) + (0.45*14%)

= 13.50% is the answer

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