Question

If you invest 30% of your funds in AT&T stock with an expected rate of return...

If you invest 30% of your funds in AT&T stock with an expected rate of return of 10% and the remainder in GM stock with an expected rate of return of 15%, the expected return on your portfolio is

0 0
Add a comment Improve this question Transcribed image text
Answer #1
Weight Return
a b a*b
AT&T stock 30% 10% 3.00%
GM stock 70% 15% 10.50%
Total 13.50%
So, expected return of portfolio is 13.50%
Add a comment
Know the answer?
Add Answer to:
If you invest 30% of your funds in AT&T stock with an expected rate of return...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • If you invest 35% of your investment in MicroGap with an expected rate of return of...

    If you invest 35% of your investment in MicroGap with an expected rate of return of 14 % and the remainder in Amgen with an expected rate of return of 8 %, the expected return on your portfolio is: 12.4% 13.6% 10.1% 11.5%

  • What is the expected return of three-stock portfolio if you invest 30% of your investment into...

    What is the expected return of three-stock portfolio if you invest 30% of your investment into a stock with the expected return of 13%, 50% into a stock with the expected return of 8%, and the rest into a stock with the expected return of 3%? Round to the nearset hundredth percent. Answer in the percent format. Do not include % sign in your answer (i.e. If your answer is 4.33%, type 4.33 without a % sign at the end.)

  • 3. You have a risky portfolio that yields an expected rate of return of 15% with...

    3. You have a risky portfolio that yields an expected rate of return of 15% with a standard deviation of 25%. Draw the CAL for an expected return/standard deviation diagram if the risk free rate is 5%. a. What is the slope of the CAL? b. If your coefficient of risk aversion is 5, how much should you invest in the risky portfolio? 4. A pension fund manager is considering three mutual funds. The first is a stock fund, the...

  • You invest $18,000 in a stock portfolio with an expected return of 14% and a standard...

    You invest $18,000 in a stock portfolio with an expected return of 14% and a standard deviation of 24%. You invest $12,000 in a bond portfolio with an expected return of 6% and a standard deviation of 12%. The correlation between the two funds is 0.45. What is the standard deviation of the resulting portfolio?

  • Assume that you manage a risky portfolio with an expected rate of return of 17% and...

    Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate is 7%. Your risky portfolio includes the following investments in the given proportions: Stock A 27% Stock B 33% Stock C 40% Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an...

  • 4. Portfolio Expected Return (L01) You have $10,000 to invest in a stock portfolio. Your choices...

    4. Portfolio Expected Return (L01) You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 11.5 percent and Stock Y with an expected return of 9.4 percent. If your goal is to create a portfolio with an expected return of 10.85 percent, how much money will you invest in Stock X? In Stock Y?

  • You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock...

    You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock B, and the remainder in Stock C. Baseda the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy .2e Recession Normal Boom Return if State Occurs Stock A Stock B Stock C - 16.6% - 2.8% -21.7% 12.4% 7.4% 16.0% 26.4% 14.7% 30.6%

  • Assume that you manage a risky portfolio with an expected rate of return of 15% and...

    Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 40%. The T-bill rate is 5%. Your risky portfolio includes the following investments in the given proportions: Stock A 24 % Stock B 33 Stock C 43 Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have...

  • You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock...

    You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State Return if State Occurs of Economy Stock A Stock B Stock C Recession .24 - 14.2 % - 1.6 % - 20.5 % Normal .44 10.4 % 6.2 % 14.8 % Boom .32 24.0 % 13.5 % 29.4...

  • OPEN ENDED Question 1. Provide your calculations with your answer. You invested 70% of your funds...

    OPEN ENDED Question 1. Provide your calculations with your answer. You invested 70% of your funds in ABC stock with an expected rate of return of 10% and the remainder in XYZ stock with an expected return of 15%. The expected return of your portfolio that consists of both stocks is:

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT