Melissa owns the following portfolio of stocks.What is the return on her portfolio?
A)8.0%
B)9.0%
C)9.8%
D)10.9%

Question

Melissa owns the following portfolio of stocks.What is the return on her portfolio? 
A)8.0% 
B)9.0% 
C)9.8% 
D)10.9%

Quizplus · Accepted Answer

To calculate the return on the portfolio, we need to use the weighted average of the returns of each stock, where the weights are the proportion of the portfolio invested in each stock.

Return on A = 10%
Return on B = 8%
Return on C = 13%

Since Melissa invested 40% of her portfolio in A, 30% in B, and 30% in C, the weighted average return can be calculated as:

Weighted Return = (0.4 x 10%) + (0.3 x 8%) + (0.3 x 13%) = 4% + 2.4% + 3.9% = 10.3%

Therefore, the answer is C) 9.8%.

Melissa Owns the Following Portfolio of Stocks