You own a portfolio that has $2,150 invested in Stock A and $3,200 invested in S

Question

You own a portfolio that has $2,150 invested in Stock A and $3,200 invested in Stock B. If the expected returns on these stocks are 10 percent and 17 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

A.)14.47%

B.)14.90%

C.)12.81%

D.)14.19%

E.)13.50%

You own a portfolio that has $2,150 invested in Stock A and $3,200 invested in Stock B. If the expected returns on these stocks are 10 percent and 17 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

Explanation / Answer

Weight of stock A = 2150/5350 = 0.4019

Weight of stock B = 1-0.4019 = 0.5981

ER(P) = 0.4019x10% + 0.5981x17%

= 14.19%

Therefore answer will be (D) 14.19%

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