Assume a two-stock portfolio with $50,000 invested in Stock A and $30,000 invested in Stock B. The expected return of Stock A is 12% and the expected return of Stock B is -2%. What's the expected portfolio return? Group of answer choices 7.50% 6.75% 10.0% 6.0%

Assume a two-stock portfolio with $50,000 invested in Stock A and $30,000 invested in Stock B. The expected return of Stock A is 12% and the expected return of Stock B is -2%. What's the expected portfolio return? Group of answer choices 7.50% 6.75% 10.0% 6.0%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

See similar textbooks

Related questions

Q: A portfolio consists of $17,000 in Stock M and $27,900 invested in Stock N. The expected return on…

A: Given information: Stock M amount is $17,000 Stock N amount is $27,900 Expected return on Stock M is…

Q: A portfolio is invested 15 percent in Stock G, 55 percent in Stock J, and 30 percent in Stock K. The…

A: Portfolio's expected return is the weighted sum of return of each stock.

Q: Stocks A and B have expected returns of 0.119 and 0.133, respectively. You form a portfolio…

A: Expected Return of Portfolio comprising of 2 stocks is computed as follows:-Rp =…

Q: Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7 Stock X -1% -1% 9% 9% 1% -2% 5%…

A: Here, PeriodStock XStock…

Q: A portfolio has three stocks. Their portfolio weights and expected returns are as follows.…

A: The expected return on a portfolio indicates the overall expected return from the portfolio. The…

Q: A portfolio is invested 25 percent in Stock G, 55 percent in Stock J, and 20 percent in Stock K. The…

A: The expected return from the portfolio is calculated by multiplying the probability by its…

Q: You own a portfolio that has $3,000 invested in Stock A and $4,100 invested in Stock B. Assume the…

A: The expected return on portfolio is calculated as weighted proportion of stock multiplied by the…

Q: You own a portfolio that has $1,700 invested in Stock A and $3,050 invested in Stock B. If the…

A: Expected return= Probability / Weight * Return= Return A * investment in A / Total Investment +…

Q: you hold a portfolio made up of the following stocks: Investment Value Beta Stock X $4,000…

A: To determine the beta of the portfolio, we first need to determine the weights of each stock of the…

Q: Assume a portfolio is made up of three stocks: Expected Return Investment Beta Stock A 18% $150,000…

A: First weights of each stock in the investment is calculated as investment in stock divided by total…

Q: You have a 2-stock portfolio with an expected return of 12 percent. Stock A has weight of 8 percent.…

A: The Expected portfolio or overall rate of return of the portfolio is the total return that is…

Q: What is the expected return for the following portfolio? (State your answer in percent with two…

A: Expected return of portfolio comprising of multiple different securities is computed as…

Q: You own a portfolio that has $2,500 Invested in Stock A and $3,850 Invested in Stock B. If the…

A: Investment in stock A = $2,500Investment in Stock B = $3,850Total Investment = $2,500 + $3,850 =…

Q: You own a portfolio that has $1,700 invested in Stock A and $3,300 invested in Stock B If the…

A: Investment in stock A = $1,700Investment in stock B = $3,300Total Investment = $1,700 + $3,300 =…

Q: A portfolio consists of $15,400 in Stock M and $23,900 invested in Stock N. The expected return on…

A: Given: Investment in stock M = $15,400 Investment in stock N = $23,900 Stock M return = 9.20% Stock…

Q: Required: a. The expected returns for stock A and stock B b. The standard deviation of stock A and…

A: The expected return of the stock is the return that the stock would provide on average after every…

Q: You have a portfolio that is invested 22 percent in Stock A, 32 percent in Stock B, and 46 percent…

A: Beta of portfolio is weighted average beta of individual stock's beta

Q: You decide to invest in a portfolio consisting of 15 percent Stock �, 51 percent Stock Y, and the…

Q: Consider an investment portfolio that consists of three different stocks, with the amount invested…

A: Given The risk free rate is 2.5% The market risk premium is 6%

Q: Investor Z has $100,000 invested in a 2-stock portfolio. $33,000 is invested in Stock X, and the…

A: The question is based on the concept of Portfolio management. Beta is considered as a responsiveness…

Q: Calculate the portfolio beta for the following portfolio: Stock A: $638 invested with a Beta of 1.3…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: An investor wants to earn 18% return by investing in a portfolio that contains Stock 1, Stock 2, and…

A: Given:Investor want to earn 18% return in a protfolio consists of stock 1,2,3.Expected return of…

Q: Qn4: Assume a two-stock portfolio created with $50,000 is invested in both HT and Collections. The…

A: Here,Investment in both Assets is $50,000 EconomyProbHTCollRecession0.10-27.00%27.00%Below…

Q: You decide to invest in a portfolio consisting of 25 percent Stock A, 35 percent Stock B, and the…

A: Expected Return: The expected return is the minimum required rate of return which an investor…

Q: You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the…

A: The standard deviation of a portfolio is the total risk of the portfolio arising out of expected…

Q: Donald Gilmore has $100,000 invested in a 2-stock portfolio. $77,500 is invested in Stock X and the…

A: Portfolio Beta is the weighted average beta of individual stock's beta

Q: Donald Gilmore has $100,000 invested in a 2-stock portfolio. $30,000 is invested in Stock X and the…

A: Beta is the measure of systematic risk. formula for portfolio beta: βp=w1×β1+w2×β2where,w1= weight…

Q: Donald Gilmore has $100,000 invested in a 2-stock portfolio. $70,000 is invested in Stock X and the…

A: Given: Total investment = $100,000 Investment in Stock X = $70,000 Investment in stock Y = $30,000 (…

Q: You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the…

A: Expected return of portfolio = (weight of stock A × Expected return of A) + (weight of stock B ×…

Question

Assume a two-stock portfolio with $50,000 invested in Stock A and $30,000 invested in Stock B. The expected return of Stock A is 12% and the expected return of Stock B is -2%. What's the expected portfolio return?
Group of answer choices
7.50%
6.75%
10.0%
6.0%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Information Provided:

VIEW

Step 2: Computation:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Bed You own a portfolio that has $1,700 invested in Stock A and $3,050 invested in Stock B. If the expected returns on these stocks are 12 percent and 15 percent, respectively, what is the expected return on the portfolio? (Do not round your intermediate calculations.) Multiple Choice 13.50% 13.07% 14.20% 14.62% 13.93%
Help Save & Exit Submit A portfolio consists of $17,000 in Stock M and $27,900 invested in Stock N. The expected return on these stocks is 9.80 percent and 13.40 percent, respectively. What is the expected return on the portfolio? Multiple Choice 11.60% 12.04% 10.23% 12.72% 11.16% ( Prev 36 of 40 Next
q2a
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? Multiple Choice O о 11.27% 10.53% 11.93% 9.65%
q2c-
if you were to invest 40% in A and 60% in B, what would be the expected return of your portfolio? Enter return in decimal form, rounded to 4th digit, as in "0.1234"
You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio? State of Economy Probability of State Return if State Occurs of Economy Stock X Stock Y Stock Z Normal .77 10.50% 3.90% 12.90% Boom .23 17.80% 25.80% 17.30% Multiple Choice 5.79% 2.51% 3.35% 8.44% 7.24%
Give typing answer with explanation and conclusion
Donald Gilmore has $100,000 invested in a 2-stock portfolio. $70,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? Select the correct answer. a. 1.31 b. 1.36 c. 1.41 d. 1.46 e. 1.26
please help!
Investor Z has $100,000 invested in a 2-stock portfolio. $33,000 is invested in Stock X, and the remainder is invested in Stock Y. Stock X's Beta is 1.50 and Y's Beta is 1.10. What is the portfolio's Beta? Group of answer choices 1.42 1.10 1.50 1.37 1.23
A portfolio is invested 15 percent in Stock G, 55 percent in Stock J, and 30 percent in Stock K. The expected returns on these stocks are 11 percent, 16 percent, and 29 percent, respectively. What is the portfolio's expected return? Multiple Choice 19.92% 19.15% 20.11% 14.93%