Dashing Daniella holds 90% of her assets in high-technology stocks, earning 12%, and 10% in long-term government bonds, earning 6%. The expected return on her portfolio is:

Question

Quizplus · Accepted Answer

To find the expected return on her portfolio, we simply multiply the weight of each asset by its expected return and then sum the results.

Expected return = 0.9(12%) + 0.1(6%) = 10.8% + 0.6% = 11.4%

Therefore, the answer is choice letter A.

Dashing Daniella Holds 90% of Her Assets in High-Technology Stocks