Question

# A portfolio consists of \$15,400 in Stock M and \$23,900 invested in Stock N. The expected...

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?

Total investment=(15400+23900)=\$39300

Expected return of portfolio=Respective return*Respective investment weight

=(15400/39300*9.2)+(23900/39300*12.6)

which is equal to

=11.27%(Approx).

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