connect instructions thelp Save & L SuDm Questor, 8 for 80] Tne remaning 3:4226
ID: 2805750 • Letter: C
Question
connect instructions thelp Save & L SuDm Questor, 8 for 80] Tne remaning 3:4226 8 Use the folowing table Large stocks Smal stocks Long-term corporale bonds Long-term government boeds U S Treasury bils labon 16.5 828 6.10 3 88 3.10 y stocks and long-term corporate bonds (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16) ( o that was equaly invested in large-company stocks and long-term corporate bonds a·Determine the renum on a portici Portfolio Return b. What was the return on a port Portfolio Return tolio that was equally invested i n small slocks and Treasury bils? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 1:30 PM 2/16/20179Explanation / Answer
Answer to Part a):
Return on a Portfolio = (Weight of Large Company Stock * Return on Large Company Stock) + (Weight of Long Term Corporate Bonds * Return on Long Term Corporate Bonds)
Return on a Portfolio = (0.50 * 0.1186) + (0.50 * 0.0628)
Return on a Portfolio = 0.0593 + 0.0314
Return on a Portfolio = 0.0907
or Return on a Portfolio = 9.07%
Answer to Part b):
Return on a Portfolio = (Weight of Small Stock * Return on Small Stock) + (Weight of Treasury Bills * Return on Treasury Bills)
Return on a Portfolio = (0.50 * 0.1656) + (0.50 * 0.0388)
Return on a Portfolio = 0.0828 + 0.0194
Return on a Portfolio = 0.1022
or Return on a Portfolio =10.22%
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