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You have ​$55,000. You put 19% of your money in a stock with an expected return...

You have ​$55,000. You put 19% of your money in a stock with an expected return of 12​%, $37,000 in a stock with an expected return of 16​%, and the rest in a stock with an expected return of 22​%. What is the expected return of your​ portfolio?

The expected return of your portfolio is.... (round two decimal places)

The weight of the second stock is...

the weight of the third​ stock....

determine the expected return of the​ portfolio....

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Answer #1

Weight of investment in Stock with expected return of 12% = 19%

Weight of investment in Stock with expected return of 16% = 37000/55000 = 67%

Weight of investment in Stock with expected return of 22% = 100%-(19% +67%) =14%

Expected return of your portfolio= weight of stock 1 × expected return of stock 1 + weight of stock 2× expected return of stock 2 +  weight of stock 3 × expected return of stock 3

Expected return of your portfolio = 19%×12% + 67%×16% +14%×22%= 16.08%

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