You own a portfolio that is 32 percent invested in Stock X, 22 percent in Stock

Question

You own a portfolio that is 32 percent invested in Stock X, 22 percent in Stock Y, and 46 percent in Stock Z. The expected returns on these three stocks are 8 percent, 14 percent, and 10 percent, respectively. What is the expected return on the portfolio?

Please show your calculations on how you came to that conclusion.

You own a portfolio that is 32 percent invested in Stock X, 22 percent in Stock Y, and 46 percent in Stock Z. The expected returns on these three stocks are 8 percent, 14 percent, and 10 percent, respectively. What is the expected return on the portfolio?

Please show your calculations on how you came to that conclusion.

Explanation / Answer

expected return on the portfolio =wx*rx + wy*ry+ wz*rz = 32%*8% + 22%*14% + 46%*10% = 10.24%

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