Answer:
The answer is 0.1174 or 11.74 %
Step-by-step explanation:
Solution
Given that:
Stock X =28%
Stock Y = 43%
Stock Z = 29%
The expected returns for the three stock are =9%, 12%, 14 %
The next step is to find the portfolio expected return
Thus,
the formula for expected return on the portfolio is given below:
Expected return of portfolio = WxRx +WyRy + WzRz
=( 0.28 *0.09) + (0.43 * 0.12) + (0.29 * 0.14)
=0.0252 + 0.0516 + 0.0406
= 0.1174 or 11.74%