You own a portfolio that has $2,000 invested in Stock A and $1,400 invested in Stock B. The expected returns on these stocks are 14 percent and 9 percent, respectively. What is the expected return on the portfolio?
A) 11.06 percent
B) 11.50 percent
C) 11.94 percent
D) 12.13 percent
E) 12.41 percent

Question

Quizplus · Accepted Answer

E(R_p) = [$2,000/($2,000 + $1,400)] [0.14] + [$1,400/($2,000 + $1,400)] [0.09] = 11.94 percent

You Own a Portfolio That Has $2,000 Invested in Stock