A portfolio consists of $38,312 of Stock A,$42,509 of Stock B,and $11,516 of Stock C.The expected returns on Stocks A,B,and C are 6.85 percent,12.08 percent,and 15.92 percent,respectively.What is the portfolio expected rate of return?
A)9.98%
B)11.21%
C)11.88%
D)10.39%
E)12.07%

Question

Quizplus · Accepted Answer

Portfolio value = $38,312 + $42,509 + $11,516 = $92,337 E(r)= 0.0685($38,312 / $92,337)+ 0.1208($42,509 / $92,337)+ 0.1592($11,516 / $92,337)= 0.1039,or 10.39%

A Portfolio Consists of $38,312 of Stock A,$42,509 of Stock