Portfolio Return Year to date, Company Y had earned a 10.8 percent return. During the same time period, Company R earned 12.20 percent and Company C earned -1.56 percent. If you have a portfolio made up of 45 percent Y, 35 percent R, and 20 percent C, what is your portfolio return?
A) 7.15%
B) 8.19%
C) 8.82%
D) 9.44%

Question

Quizplus · Accepted Answer

To calculate the portfolio return, we need to find the weighted average of returns of the three companies:

Portfolio Return = (Weight of Y * Return of Y) + (Weight of R * Return of R) + (Weight of C * Return of C)

Substituting the given values, we get:

Portfolio Return = (0.45 * 10.8) + (0.35 * 12.20) + (0.20 * -1.56)

= 4.86 + 4.27 - 0.31

= 8.82%

So, the portfolio return is 8.82%. Therefore, the correct answer is C.

Portfolio Return Year to Date, Company Y Had Earned a 10.8