What is the expected return for a portfolio that has $1,000 invested in Stock X,$1,500 invested in Stock Y,and $2,500 invested in Stock Z,if the expected returns on Stock X,Stock Y,and Stock Z are 10%,12%,and 15%,respectively?
A) 11.90%
B) 12.00%
C) 12.50%
D) 13.10%

Question

Quizplus · Accepted Answer

W_X = $1,000/($1,000+$1,500+$2,500)= 0.2,W_Y = $1,500/$5,000 = 0.3,W_Z = 1-0.2-0.3 = 0.5 E(R_P)= 10%*0.2 + 12%*0.3 + 15%*0.5 = 13.10%

What Is the Expected Return for a Portfolio That Has