Question

46.

You own a portfolio that has $2,450 invested in Stock A and $3,950 invested in Stock B. If the expected returns on these stocks are 12 percent and 17 percent,

respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.) r

15.39% 13.91% 15.84% 14.50% 15.09%

Answer 1

E. 15.09%

Expected return on the portfolio = ($2,450/$6,400 × 0.12) + ($3,950/$6,400 × 0.17)

Expected return on the portfolio = 0.1509 or 15.09%