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You own a portfolio that has $3,140 invested in Stock A and $4,300 invested in Stock...

You own a portfolio that has $3,140 invested in Stock A and $4,300 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 14 percent, respectively. What is the expected return on the portfolio?

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Answer #1

Expected Return on portfolio is equal to weighted average return

= 9%*3140/(3140+4300) + 14%*4300/7710

= 11.4734%

i.e. 11.47%

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