You want to create a $100,000 portfoloio that consists of three stocks. Curently

Question

You want to create a $100,000 portfoloio that consists of three stocks.   Curently, you own 40,000 shares of stock A, 20,000 shares of stock B and 40,000 shares of stock C.  The expected return for stock A is 5 percent, stock B is 20 percent and stock C is 15 percent.  What is the expected rate of retrn for the protfolio? Answer            

                            
           A. 9 percent                             
           B. 10 percent                             
           C. 12 percent                             
           D. 13 percent

Explanation / Answer

expected return of portfolio = (40000*0.05) + (20000*0.2) + (40000*0.15) = 12000/100000 =12%

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