You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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
Section: Chapter Questions
Problem 1PS
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You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B.
Assume the expected returns on these stocks are 11 percent and 17 percent,
respectively. What is the expected return on the portfolio? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Expert Solution
Step 1
Expected return of portfolio = (weight of stock A × Expected return of A) + (weight of stock B × Expected return of stock B)
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