If real estate has an expected return of 10% and stocks have an expected return of 15% then what would be the expected return of a portfolio consisting of 80% real estate and 20% stocks?
A) 11%
B) 12%
C) 13%
D) 14%

Question

Quizplus · Accepted Answer

The expected return of the portfolio can be calculated by taking the weighted average of the expected returns of its components. For real estate, it's 10% * 80% = 8%, and for stocks, it's 15% * 20% = 3%. Adding these together gives an expected return of 11% for the portfolio.

If Real Estate Has an Expected Return of 10% and Stocks