You own a portfolio consisting of the securities listed below.The expected return for each security is as shown.What is the expected return on the portfolio?

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Quizplus · Accepted Answer

Value_W = 300 × $11 = $3,300Value_X = 450 × $19 = $8,550Value_Y = 100 × $48 = $4,800Value_Z = 575 × $33 = $18,975Value_Port = $3,300 + $8,550 + $4,800 + $18,975 = $35,625Expected return = [($3,300/$35,625) × 0.089] + [($8,550/$35,625) × 0.116] + [($4,800/$35,625) × 0.284] + [($18,975/$35,625) × 0.127] = 14.20 percent

You Own a Portfolio Consisting of the Securities Listed Below