You own a portfolio that has $2,100 invested in Stock A and $3,100 invested in S

Question

You own a portfolio that has $2,100 invested in Stock A and $3,100 invested in Stock B. If the expected returns on these stocks are 10 percent and 13 percent, respectively, what is the expected return on the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

You own a portfolio that has $2,100 invested in Stock A and $3,100 invested in Stock B. If the expected returns on these stocks are 10 percent and 13 percent, respectively, what is the expected return on the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Portfolio expected return = weight of stock A*expected return on stock A + weight of stock B*expected return on stock B

= (2100/5200)*10% + (3100/5200)*13% = 4.03% + 7.75% = 11.78%

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