ECONOMICS
RISK AND RETURN
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A portfolio consists of $15, 400 in Stock M and $23, 900 invested in Stock N. The expected return on these stocks is 9.20 percent and 12.60 percent, respectively. What is the expected return on the portfolio?
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11.27
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10.25
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11.55
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11.89
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Explanation:
Detailed explanation-1: -The expected return on a portfolio composed of 40% stock A and 60% stock B is 21%.
Detailed explanation-2: -Finding your portfolio value involves first calculating the monetary value of each individual asset, then adding all of those values together. The number you get is your portfolio value.
Detailed explanation-3: -An expected return is calculated by multiplying potential outcomes by the odds of them occurring and then totaling these results. Expected returns cannot be guaranteed. The expected return for a portfolio containing multiple investments is the weighted average of the expected return of each of the investments.
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