What is the expected return on this portfolio?
A)11.48 percent
B)12.37 percent
C)13.03 percent
D)13.42 percent
E)13.97 percent

Name: What is the expected return on this portfolio? A)11.48 percent B)12.37 percent C)13.03 percent D)13.42 percent E)13.97 percent
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Question

What is the expected return on this portfolio? 
A)11.48 percent 
B)12.37 percent 
C)13.03 percent 
D)13.42 percent 
E)13.97 percent

Quizplus · Accepted Answer

Portfolio value = (300 × $28) + (500 × $10) + (600 × $19) = $8,400 + $5,000 + $11,400 = $24,800; E(r) = ($8,400/$24,800) (0.12) + ($5,000/$24,800) (0.07) + ($11,400/$24,800) (0.15) = 12.37 percent

What Is the Expected Return on This Portfolio