Question

You have gathered the following information on your investments. What is the expected return on the portfolio? Stock Number of Shares Price per Share Expected Return F 310 $ 40 13.32 % G 315 $ 26 10.05 % H 255 $ 52 10.59 %

Answer 1

Expected return on the portfolio = $3,879.00

Step-by-step explanation:

a) Data and Calculations:

Stock Number of Shares Price per Share Expected Return Expected

Value

F 310 $ 40 13.32 % $1,651.68

G 315 $ 26 10.05 % $823.09

H 255 $ 52 10.59 % $1,404.23

Total 880 $3,879.00

b) The expected return on the portfolio is the addition of the expected returns of each class of shares. This is obtained by multiplying the number of shares in each class with the price and the expected return in percentage. This gives a weighted value for the class of shares, which are then added to obtain the expected return on the portfolio.