Question

Year-to-date, Oracle had earned a −1.38 percent return. During the same time period, Valero Energy earned 7.62 percent and McDonald's earned 0.40 percent. If you have a portfolio made up of 35 percent Oracle, 30 percent Valero Energy, and 35 percent McDonald's, what is your portfolio return?

Answer 1

1.94%

Step-by-step explanation:

The computation of portfolio return is shown below:-

Portfolio return = Sum of (return from stock × Weight of stock)

= (-1.38 × 35%) + (7.62 × 30%) + (0.40 × 35%)

= 0.483 + 2.286 + 0.14

= 1.94%

Therefore for computing the portfolio return we simply multiply the sum of return from stock with sum of weight of stock.