Year-to-date, Company Y had earned a 7 percent return. During the same time period, Company R earned 9.25 percent and Company C earned −2.25 percent. If you have a portfolio made up of 35 percent Y, 40 percent R, and 25 percent C, what is your portfolio return?
A) 4.6667 percent
B) 6.1667 percent
C) 5.5875 percent
D) 12.6625 percent

Question

Quizplus · Accepted Answer

The portfolio return can be calculated by multiplying each company's return by its respective weight in the portfolio and then summing these products. For Company Y: 0.35 * 7% = 2.45% For Company R: 0.40 * 9.25% = 3.70% For Company C: 0.25 * (-2.25%) = -0.5625% Adding these together: 2.45% + 3.70% - 0.5625% = 5.5875%

Year-To-Date, Company Y Had Earned a 7 Percent Return