You own a portfolio that is 34 percent invested in Stock X, 49 percent in Stock

Question

You own a portfolio that is 34 percent invested in Stock X, 49 percent in Stock Y, and 17 percent in Stock Z. The expected returns on these three stocks are 8 percent, 11 percent, and 13 percent, respectively.

What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Expected return on portfolio = 0.34 * 0.08 + 0.49 * 0.11 + 0.17 * 0.13

= 0.0272 + 0.0539 + 0.0221

= 0.1032 or 10.32%.

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