Question

Annika has invested the following amounts in the following assets: Asset Amount Expected Return W6X Bond $12,000 8% 9J5 Stock $24,000 18% 4FY Stock $4,000 24% Determine the expected return on the portfolio. g

Answer 1

the expected return in $ = $6,240

the expected rate of return = 15.6%

Step-by-step explanation:

Asset Amount Expected Return

W6X Bond $12,000 8%

9J5 Stock $24,000 18%

4FY Stock $4,000 24%

the expected return in $ = ($12,000 x 8%) + (24,000 x 18%) + ($4,000 x 24%) = $960 + $4,320 + $960 = $6,240

the expected return in % = $6,240 / ($12,000 + $24,000 + $4,000 = $6,240 / $40,000 = 15.6%