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You own a portfolio that is invested 30 percent in stock A, 45 percent in stock...

You own a portfolio that is invested 30 percent in stock A, 45 percent in stock B, and the remainder in stock C. The expected returns on these stocks are 15.31 percent, 17.9 percent, and 13.82 percent, respectively. What is the expected return on the portfolio?

18.26% 14.97% 15.30% 16.10%

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Answer #1

Expected return on the portfolio= 0.30*15.31% + 0.45*17.9% + 0.25*13.82%

                                                              = 4.5930% + 8.0550% + 3.4550%

                                                              = 16.10% .

Hence, the answer is option d.

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