Consider the following portfolio of assets: What is the expected return on the portfolio (round to two decimals)?

Question

Consider the following portfolio of assets:  What is the expected return on the portfolio (round to two decimals)?

Quizplus · Accepted Answer

The expected return on a portfolio is simply the weighted average of the expected returns of the individual assets in the portfolio. We can calculate this by multiplying each asset's expected return by its weight in the portfolio and summing the results.

Using the weights given in the question, we can calculate the expected return of the portfolio as follows:

Expected return = 0.45(15%) + 0.7(13%)
Expected return = 6.75% + 9.10%
Expected return = 15.85%

Therefore, the expected return on the portfolio is 15.85%. Option D is the correct answer.

Consider the Following Portfolio of Assets: What Is the Expected