Final answer:
The expected return of the portfolio, calculated by weighting the returns of each stock by the proportion of the portfolio invested in each, is 15.40% when rounded to two decimal places.
Step-by-step explanation:
The expected return of your portfolio is calculated by weighting the returns of each stock by the proportion of the portfolio invested in each. First, we calculate the proportion of money not yet invested:
Total investment = $64,000
Amount invested at 18% = 18% of $64,000 = $11,520
Amount invested at 14% = $33,000
Amount remaining = $64,000 - ($11,520 + $33,000) = $19,480
Now we can calculate the expected return:
Expected return = (Proportion1 * Return1) + (Proportion2 * Return2) + (Proportion3 * Return3)
Proportion1 = $11,520 / $64,000
Proportion2 = $33,000 / $64,000
Proportion3 = $19,480 / $64,000
Expected return = (Proportion1 * 15%) + (Proportion2 * 14%) + (Proportion3 * 18%)
Expected return = ($11,520 / $64,000 * 15%) + ($33,000 / $64,000 * 14%) + ($19,480 / $64,000 * 18%)
Expected return = (0.18 * 15%) + (0.515625 * 14%) + (0.3046875 * 18%)
Expected return = 2.7% + 7.21875% + 5.484375%
Expected return = 15.403125%
Rounding to two decimal places, the expected return of the portfolio is 15.40%.