An investor wishes to construct a portfolio consisting of a 70% allocation to a stock index and a 30% allocation to a risk free asset.The return on the risk-free asset is 4.5% and the expected return on the stock index is 12%.Calculate the expected return on the portfolio.
A) 8.25%
B) 16.50%
C) 17.50%
D) 9.75%
E) 14.38%

Question

Quizplus · Accepted Answer

E(R)= 0.3(4.5)+ 0.7(12)= 9.75%

An Investor Wishes to Construct a Portfolio Consisting of a 70