You own a portfolio that has $3,500 invested in Stock A and $4,500 invested in S

Question

You own a portfolio that has $3,500 invested in Stock A and $4,500 invested in Stock B. If the expected returns on these stocks are 11 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 has $3,500 invested in Stock A and $4,500 invested in Stock B. If the expected returns on these stocks are 11 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

Expeccted Return on Portfolio = ((Weight of stock A * Expected Return) + (Weight of stock B * Expected Return))

= ((3500 / 8000) * 0.11) + ((4500 / 8000) * 0.14) = 0.1269 = 12.69%

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