Suppose you invest $15,000 in Merck stock and $25,000 in Home Depot stock.You receive an actual return of -8% for Merck and 12% for Home Depot.What is the actual return on your portfolio?
A)4.50%
B)4.00%
C)10.00%
D)2.00%

Question

Quizplus · Accepted Answer

The actual return on the portfolio is calculated by taking the weighted average of the returns of the individual investments. The portfolio return is: [(15000 * -0.08) + (25000 * 0.12)] / (15000 + 25000) = 4.50%.

Suppose You Invest $15,000 in Merck Stock and $25,000 in Home