You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent in Bel

Question

You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.08, 0.20, and 0.20, respectfully? Can you share the formula to complete? You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.08, 0.20, and 0.20, respectfully? Can you share the formula to complete?

Explanation / Answer

Expected return of your portfolio = Weight of Jacob, Inc.* xpected returns of Jacob, Inc +  Weight of Bella Co.*Expected returns of Bella Co. +  Weight of Edward Resources.*Expected returns of Edward Resources

Expected return of your portfolio = 30%*0.08 + 40%*0.20 + 30%*0.20

Expected return of your portfolio = 0.164

Expected return of your portfolio = 16.40%

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