If you invest 40% of your investment in GE with an expected rate of return of 10% and the remainder in IBM with an expected rate of return of 16%, the expected return on your portfolio is:
A)12.4%
B)13%
C)13.6%
D)14.5%

Question

Quizplus · Accepted Answer

Weighted average expected return = (0.4 x 10%) + (0.6 x 16%) = 4% + 9.6% = 13.6%. Therefore, the expected return on the portfolio is 13.6%.

If You Invest 40% of Your Investment in GE with an Expected