If you invested $30,000 in Disney and $10,000 in Oracle and the two companies returned 6 percent and 12 percent respectively, what was your portfolio's return?
A) 18.0 percent
B) 10.5 percent
C) 9.0 percent
D) 7.5 percent

Question

Quizplus · Accepted Answer

The portfolio's return is calculated by taking the weighted average of the returns. The total investment is $40,000. Disney's contribution is (30,000/40,000)*6% = 4.5% and Oracle's contribution is (10,000/40,000)*12% = 3%. Adding these gives a total portfolio return of 7.5%.

If You Invested $30,000 in Disney and $10,000 in Oracle