Final answer:
The expected return on the portfolio is calculated by summing the products of the investment percentages and their respective expected returns. The portfolio's expected return is found to be 11.55%, which does not match any of the given multiple-choice options.
Step-by-step explanation:
The student's question involves calculating the expected return on a portfolio with different investments. To find the expected return on the portfolio, we multiply the percentage of the total investment by the expected return of each stock and then sum the results.
For Stock X, which is 35 percent of the portfolio with an expected return of 9 percent, we calculate: 0.35 * 9% = 3.15%.
For Stock Y, which is 20 percent of the portfolio with an expected return of 15 percent, we calculate: 0.20 * 15% = 3.00%.
For Stock Z, which is 45 percent of the portfolio with an expected return of 12 percent, we calculate: 0.45 * 12% = 5.40%.
Add up these results to get the total expected return on the portfolio:
3.15% + 3.00% + 5.40% = 11.55%
Therefore, the expected return on the portfolio would be 11.55%, which means the correct answer is not listed in the given options (a, b, c, d).
You own a portfolio that is invested 35 percent in Stock X, 20 percent in Stock Y, and 45 percent in Stock Z.