You are considering investing in three stocks with the following expected returns: Stock A......... 7% Stock B.........

Question:

You are considering investing in three stocks with the following expected returns:
Stock A......... 7%
Stock B......... 12
Stock C.......... 20
What is the expected return on the portfolio if an equal amount is in-vested in each stock? What would be the expected return if 50 percent of your funds is invested in stock A and the remaining funds are split evenly between stocks B and C?
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Question Posted: