Given the following forecasts,what is the expected return for a portfolio that has $2,200 invested in Stock X,$3,600 in Stock Y,and $4,200 invested in Stock Z?
A) 10.62%
B) 14.82%
C) 30.50%
D) 33.25%

Question

Quizplus · Accepted Answer

E(R_X)= 25%*35% + 14%*45% + 4%*20% = 15.85% E(R_Y)= (-10%)*35% + 8%*45% + 14%*20% = 2.90% E(R_Z)= 15%*35% + 25%*45% + (-10%)*20% = 14.50% w_X = $2,200/($2,200+$3,600+$4,200)= 0.22 w_Y = $3,600/$10,000 = 0.36 w_Z = $4,200/$10,000 = 0.42 E (R_P)= 15.85%*0.22+2.90%*0.36+14.5%*0.42 = 10.62%

Given the Following Forecasts,what Is the Expected Return for a Portfolio