What is the expected return for a portfolio that has $800 invested in Stock A and $1,200 invested in Stock B, if the expected returns on Stock A and Stock B are 10% and 18%, respectively?
A)14.00%
B)14.80%
C)13.20%
D)12.60%

Question

Quizplus · Accepted Answer

The weighted average return of the portfolio can be calculated as follows:
(0.10 x 800) + (0.18 x 1,200) = 80 + 216 = 296
The total amount invested in the portfolio is $2,000, so the expected return as a percentage is:
(296/2,000) x 100 = 14.8%
Therefore, the answer is B, 14.80%.

What Is the Expected Return for a Portfolio That Has