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Suppose you invest $20 000 by purchasing 400 shares of BHP Billiton (BHP)at $13 per share, 500 shares of ANZ Bank (ANZ)at $20 per share, and 200 shares of Flight Centre (FLT)at $24 per share.
-Suppose over the next year BHP has a return of 12.5%, ANZ has a return of 20%, and FLT has a return of -10%. The return on your portfolio over the year is:

Question

Quizplus · Accepted Answer

To calculate the return on the portfolio, we need to find the overall gain or loss on the initial investment.

For BHP, the returns would be: 
400 shares x $13 per share x 12.5% return = $6,500

For ANZ, the returns would be: 
500 shares x $20 per share x 20% return = $20,000

For FLT, the returns would be: 
200 shares x $24 per share x -10% return = -$4,800

Adding up the returns from each investment, we get: 
$6,500 + $20,000 - $4,800 = $21,700

The overall return on the portfolio is then: 
($21,700 / $20,000) x 100% = 108.5%

So the answer is D, 10.85% return on the portfolio.

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