An investor owns a portfolio of $45,000 that contains $15,000 in stock A, with an expected return

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An investor owns a portfolio of $45,000 that contains $15,000 in stock A, with an expected return of 12 percent; $10,000 in bonds, with an expected return of 8 percent; and the rest in stock B, with an expected return of 20 percent. Calculate the expected return of the portfolio.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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