You own a portfolio that is 38 percent invested in Stock X, 24 percent in Stock

Question

You own a portfolio that is 38 percent invested in Stock X, 24 percent in Stock Y, and 38 percent in Stock Z. The expected returns on these three stocks are 12 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 38 percent invested in Stock X, 24 percent in Stock Y, and 38 percent in Stock Z. The expected returns on these three stocks are 12 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

Expected Return on Portfolio = Weight in Stock*Expected Return in Stock
= 0.38*12 + 0.24*18 + 0.38*14
= 14.2%

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