At the beginning of the month, you owned $6,000 of Company G, $8,000 of Company S, and $1,000 of Company N. The monthly returns for Company G, Company S, and Company N were 7.25 percent, -1.50 percent, and -0.23 percent. What is your portfolio return?
A)1.84 percent
B)2.08 percent
C)3.71 percent
D)5.52 percent

Question

Quizplus · Accepted Answer

The portfolio return is calculated by weighting each company's return by its proportion in the portfolio. The total portfolio value is $15,000. The weighted returns are: Company G: (6000/15000)*7.25%, Company S: (8000/15000)*(-1.50%), Company N: (1000/15000)*(-0.23%). Adding these gives a portfolio return of 2.08%.

At the Beginning of the Month, You Owned $6,000 of Company