Question

What is the expected return of your portfolio?

You have a portfolio with the following: Stock w х Number of Shares 725 625 375 600 Price $ 46 23 59 Expected Return 13% 17 15 Ž 44

Expected Return= ? %

Answer 1

Expected return of a portfolio is weighted average of the return of the individual constituents.

A G Stock Weighted Return W x B Number of Shares 725 625 375 600 - C E F Expected Price Value Weight Return 46 13% 33350 34.65% 23 17% 14375 14.94% 15% 22125 22.99% 16% 26400 27.43% Portfolio Expected Return 4.50% 2.54% nm roce 3.45% 44 4.39% 14.88%

А G Stock Number of Shares Price Expected Return Value Weight Weighted Return 725 625 375 600 0.13 0.17 0.15 0.16 =B2*C2 =E2/SUM($E$2:$E$5) =D2* F2 =B3*C3 =E3/SUM($E$2:$E$5) =D3*F3 =B4*C4 =E4/SUM($E$2:$E$5) =D4*F4 =B5*C5 =E5/SUM($E$2:$E$5) =D5*F5 Portfolio Expected Return =SUM(G2:65)