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
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