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You own a portfolio that has $3,800 invested in Stock A and $4,800 invested in Stock B. If the expected returns on these stocks are 8 percent and 11 percent, respectively, what is the expected return on the portfolio

Respuesta :

Answer:

the expected return on the portfolio is 9.67%

Explanation:

The computation of the expected return on the portfolio is as follows:

= Expected return of A ×  Investment A ÷ Total Investment + Expected return of B ×  Investment B ÷ Total Investment

= 8% × $3,800 ÷ ($3,800 + $4,800) + 11% × $4,800 ÷ ($3,800 + $4,800)

= 3.53% + 6.14%

= 9.67%

Hence, the expected return on the portfolio is 9.67%

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