Your portfolio that has $500 invested in Stock A and $1,500 invested in Stock B.If the expected returns on Stock A and Stock B are 7% and 23%,respectively,what is the portfolio return?
A) 19.00%
B) 17.80%
C) 16.10%
D) 12.00%

Question

Quizplus · Accepted Answer

Portfolio weight in A = $500/($500+$1,500)= 0.25,Portfolio weight in B = $1500/($500+$1,500)= 0.75
E(R)= 7%*25% + 23%*75% = 0.19 F1S1S1W1F1F1F10 19%

Your Portfolio That Has $500 Invested in Stock a and $1,500