You have invested 40 percent of your portfolio in an investment with an expected return of...

Question

Question

Answer 1

Answer #1

The expected return of portfolio is computed as shown below:

= Investment in security 1 x return on security 1 + Investment in security 2 x return on security 2

= 0.40 x 0.12 + 0.60 x 0.16

= 14.4%

So the correct answer is option of 14.4%

Feel free to ask in case of any query relating to this question

Answer 2

Similar Homework Help Questions

You have invested 22 per cent of your portfolio in an investment with an expected return...

You have invested 22 per cent of your portfolio in an investment with an expected return of 11 per cent and 78 per cent of your portfolio in an investment with an expected return of -0 per cent. What is the expected return of your portfolio? (as a percentage to two decimal places; eg 2.881% is 2.88))
S13-03 Portfolio Expected Return [LO1] You own a portfolio that is invested 35 percent in Stock...

S13-03 Portfolio Expected Return [LO1] You own a portfolio that is invested 35 percent in Stock X, 20 percent in Stock Y, and 45 percent in Stock Z. The expected returns on these three stocks are 9 percent, 15 percent, and 12 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Portfolio expected...
You have invested 8 per cent of your portfolio in an investment with an expected return of 10 per cent and 92 per cent o...

You have invested 8 per cent of your portfolio in an investment with an expected return of 10 per cent and 92 per cent of your portfolio in an investment with an expected return of -7 per cent. What is the expected return of your portfolio? (as a percentage to two decimal places; eg 2.881% is 2.88)) Select one: a. -5.64% b. 8.64% c. 3.56% d. -6.14%

You have invested 30 percent of your portfolio in Jacob Inc., 40 percent in Bella Co.,...

You have invested 30 percent of your portfolio in Jacob Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.07, 0.19, and 0.03, respectfully
Thank you so much You currently have $150,000 invested in a portfolio that has an expected...

Thank you so much You currently have $150,000 invested in a portfolio that has an expected return of 11% and a volatility of 9%. Suppose the risk-free rate is 4%, and there is another portfolio has an expected return of 16% and a volatility of 12%. a. What portfolio has a higher expected return than your portfolio but with the same volatility? b. What portfolio has a lower volatility than your portfolio but with the same expected return? a. What...
You have invested 13 per cent of your portfolio in an investment with an expected return of 9 per cent and 87 per cent o...

You have invested 13 per cent of your portfolio in an investment with an expected return of 9 per cent and 87 per cent of your portfolio in an investment with an expected return of 6 per cent. What is the expected return of your portfolio?

You have a portfolio worth $88,500 that has an expected return of 11 percent. The portfolio...

You have a portfolio worth $88,500 that has an expected return of 11 percent. The portfolio has $17,900 invested in Stock O, $25,700 invested in Stock P, with the remainder in Stock Q. The expected return on Stock O is 15.6 percent and the expected return on Stock P is 12.3 percent. What is the expected return on Stock Q? 13.07% 11.30% 9.83% 10.52% 8.42%
2. You have decided to dissect you grandparent's investment "portfolio” to determine their expected return on...

2. You have decided to dissect you grandparent's investment "portfolio” to determine their expected return on the portfolio and the risk associated with their investments. You were under the impression that your grandparents had a wide array of securities that they were investing in, however, you find that they have invested all of their retirement money into two securities. The first security (45 percent of the portfolio) has an expected return of 17.1 percent with a retu standard deviation of...
40. What is the expected return for the following portfolio? (State your answer in percent with...

40. What is the expected return for the following portfolio? (State your answer in percent with two decimal places.) Stock Expected returns Investment AAA 34% $400,000 BBB 29% $1,100,000 CCC 19% $1,500,000 DDD 5% $1,400,000

You own a portfolio that has $2,300 invested in Stock A and $3,300 invested in Stock...

You own a portfolio that has $2,300 invested in Stock A and $3,300 invested in Stock B. If the expected returns on these stocks are 8 percent and 11 percent, respectively, what is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Portfolio expected return You own a portfolio that is 35 percent invested in Stock X, 20 percent in Stock Y, and 45...