What is the FI's expected return on its loan portfolio?

Question

Quizplus · Accepted Answer

11efb88c_f9dc_6f9b_ba2a_e501296e5ee7_TB1314_00 The FI's expected return on its loan portfolio can be calculated by taking the weighted average of the returns on each loan category, multiplied by the proportion of the total portfolio that each category represents. Using the data given, we can calculate the expected return as follows:

(0.50 x 12%) + (0.30 x 15%) + (0.20 x 20%) = 6% + 4.5% + 4% = 14.5%

Therefore, the closest answer is D, 14.67 percent.

What Is the FI's Expected Return on Its Loan Portfolio