U TIc plans LU Imvest $2,500 in stock X, $2.0C E. What return should Chan expect to earn from this

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A wealth management company contacted Chan and would like to introduce a new
stock portfolio to him. This portfolio will consist of three stocks only: X with an
expected return of 12%; Y with an expected return of 5%; and Z with an expected
return of 2%. Chan is a return-chaser so he plans to invest $2,500 in stock X, $2,000
in stock Y, and $500 in stock Z. What return should Chan expect to earn from this
portfolio?
O a) 10%
O b) Cannot be determined
c) 12.2%
d) 8.20%
e) 15%
Transcribed Image Text:A wealth management company contacted Chan and would like to introduce a new stock portfolio to him. This portfolio will consist of three stocks only: X with an expected return of 12%; Y with an expected return of 5%; and Z with an expected return of 2%. Chan is a return-chaser so he plans to invest $2,500 in stock X, $2,000 in stock Y, and $500 in stock Z. What return should Chan expect to earn from this portfolio? O a) 10% O b) Cannot be determined c) 12.2% d) 8.20% e) 15%
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