What is the expected return on a portfolio with weights of 60% in asset A and 40% in asset B?
A) 2.2%
B) 4.4%
C) 5.8%
D) 8.8%
E) 9.9%

Question

Quizplus · Accepted Answer

To calculate the expected return on the portfolio, we need the expected return of each asset and its weight in the portfolio. Let's assume that asset A has an expected return of 10% and asset B has an expected return of 5%.

Expected return on the portfolio = (weight of asset A x expected return of asset A) + (weight of asset B x expected return of asset B)

Expected return on the portfolio = (0.60 x 10%) + (0.40 x 5%) = 6% + 2% = 8%

Thus, the expected return on a portfolio with weights of 60% in asset A and 40% in asset B is 8%. Therefore, the best choice is C.

What Is the Expected Return on a Portfolio with Weights