$36 000 n a stock w You have S55,000. You put 23% of your money in a stock with an expected return of 129 with an expected return of 21%. What is the expected return of your portfolio? n an expected...

Question

Question

$36 000 n a stock w You have S55,000. You put 23% of your money in a stock with an expected return of 129 with an expected re

Answer 1

Answer #1

Solution:

The expected return of the portfolio = 13.69 %

Note :

1. Investment in first stock = 23 % of total investment

= 23 % * $ 55,000 = $ 12,650

2. Investment in second stock = $ 36,000

3. Investment in third stock = Total Investment - Investment in First stock - Investment in second stock

= $ 55,000 - $ 12,650 - $ 36,000 = $ 6,350

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

Answer 2

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