A two- asset portfolio is made up of 60 per cent of funds with expected return 13 per cent, and 40 per cent of funds with expected return 15 per cent. What is the total return expected from the portfolio?
A) 13.8%
B) 12.8%
C) 18.8%
D) 14.8%

Question

Quizplus · Accepted Answer

The expected return of the portfolio is calculated by taking the weighted average of the expected returns of the individual assets. Therefore, the calculation is (0.60 * 13%) + (0.40 * 15%) = 7.8% + 6% = 13.8%.

A Two- Asset Portfolio Is Made Up of 60 Per