You own a portfolio of two stocks,A and B.Stock A is valued at $6,500 and has an expected return of 11.2 percent.Stock B has an expected return of 8.1 percent.What is the expected return on the portfolio if the portfolio value is $9,500?
A)9.58 percent
B)9.62 percent
C)9.74 percent
D)10.07 percent
E)10.22 percent

Question

Quizplus · Accepted Answer

Value_B = $9,500 - $6,500 = $3,000Expected return = [($6,500/$9,500) × 0.112] + [($3,000/$9,500) × 0.081] = 10.22 percent

You Own a Portfolio of Two Stocks,A and B