Question

You own a portfolio that is 25 percent invested in Stock X, 30 percent invested in...

You own a portfolio that is 25 percent invested in Stock X, 30 percent invested in Stock Y, and 45 percent invested in Stock Z. The expected returns of the three stocks are 11 percent, 18 percent, and 6 percent, respectively. What is the expected return of the portfolio?

A.

11.67 percent

B.

10.85 percent

C.

17.11 percent

D.

8.64 percent

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Answer #1

Portfolio return=Respective return*Respective weight

=(0.25*11)+(0.3*18)+(0.45*6)

which is equal to

=10.85%

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