Year-to-date, Company Y had earned a 10.8 percent return. During the same time period, Company R earned 12.20 percent and Company C earned -1.56 percent. If you have a portfolio made up of 45 percent Y, 35 percent R, and 20 percent C, what is your portfolio return?
A)7.15 percent
B)8.19 percent
C)8.82 percent
D)9.44 percent

Question

Quizplus · Accepted Answer

To calculate the portfolio return, we need to multiply each company's return by the weight of its investment and then add them up.

Portfolio return = (0.45 x 10.8%) + (0.35 x 12.20%) + (0.20 x 1.56%) 
Portfolio return = 4.86% + 4.27% + 0.31% 
Portfolio return = 8.82%

Therefore, the portfolio return is 8.82%. Option C is the correct answer.

Year-To-Date, Company Y Had Earned a 10