Given the following information,what is the expected return on a portfolio that is invested 35 percent in Stock A,45 percent in Stock B,and the balance in Stock C?
A)11.84 percent
B)12.53 percent
C)12.91 percent
D)13.46 percent
E)13.87 percent

Question

Given the following information,what is the expected return on a portfolio that is invested 35 percent in Stock A,45 percent in Stock B,and the balance in Stock C? 
A)11.84 percent 
B)12.53 percent 
C)12.91 percent 
D)13.46 percent 
E)13.87 percent

Quizplus · Accepted Answer

E(R_Boom)= (0.35 × 0.114) + (0.45 × 0.312) + (0.20 × 0.073) = 0.1949E(R_Normal) = (0.35 × 0.087) + (0.45 × .0.176) + (0.20 × 0.081) = 0.12585E(R_Recession) = (0.35 × -0.034) + (0.45 × -0.376) + (0.20 × 0.099) = -0.1613E(R_Portfolio) = (0.20 × 0.1949) + (0.75 × 0.12585) + (0.05 × -0.1613) = 12.53 percent

Given the Following Information,what Is the Expected Return on a Portfolio