Question

You have a portfolio that is 30 percent invested in Stock R, 15 percent invested in Stock S, with the remainder in Stock T. The expected return on these stocks is 8.1 percent, 9.5 percent, and 11.8 percent, respectively. What is the expected return on the portfolio??

Answer 1

the expected return on the portfolio is 10.35%

Step-by-step explanation:

The computation of the expected return on the portfolio is as follows:

Expected return on the portfolio is

= Respective return × respective weights

= 30% × 8.1% + 15% × 9.5% + 55% × 11.80%

= 2.43% + 1.43% + 6.49%

= 10.35%

Hence, the expected return on the portfolio is 10.35%

We simply applied the above formula so that the correct value could come

And, the same is to be considered