What is the expected rate of return on a portfolio 18% of which is invested in an S&P 500 Index fund, 65% in a technology fund, and 17% in Treasury notes.The expected rate of return is 11% on the S&P Index fund, 14% on the technology fund and 2% on the Treasury notes.
A)10.25%
B)8.33%
C)11.42%
D)9.00%

Question

Quizplus · Accepted Answer

To calculate the expected rate of return, we need to multiply the percentage of the portfolio invested in each fund by its corresponding rate of return and sum them up. (18% x 11%) + (65% x 14%) + (17% x 2%) = 1.98 + 9.1 + 0.34 = 11.42%. Therefore, the expected rate of return on the portfolio is 11.42%.

What Is the Expected Rate of Return on a Portfolio