You own a portfolio that is 28 percent invested in Stock X, 25 percent in Stock

Question

You own a portfolio that is 28 percent invested in Stock X, 25 percent in Stock Y, and 47 percent in Stock Z. The expected returns on these three stocks are 10 percent, 16 percent, and 12 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

You own a portfolio that is 28 percent invested in Stock X, 25 percent in Stock Y, and 47 percent in Stock Z. The expected returns on these three stocks are 10 percent, 16 percent, and 12 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Expected Return on portfolio = Weight of stock X * Return Of stock X + Weight Of stock Y * return Of stock y + Weight of stock Z * return Of stock Z

= 0.28*0.10+0.25*0.16+0.47*0.12

= 0.028+0.04+0.0564 i.e 12.44%

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