Trevor invested in Stocks, bond and mutual funds. His investment holdings consisted of twice as much bonds as stocks, and four times the amount of mutual funds as stocks. Last year stocks returned 4%, bonds 7% and mutual funds 2%. His average return for the year was 3.71%

Question

Quizplus · Accepted Answer

The average return is calculated by weighing each investment's return by its proportion in the total investment. Given the proportions and returns, the average return is indeed 3.71%.

Trevor Invested in Stocks, Bond and Mutual Funds