Question

"What is the Portfolio Return if you hold positions in the following stocks displayed in this format (Current price per share, # of shares in our portfolio, Return for each stock): (FIN340 Company $31.80, 50 shares, 15.5% Return); (ABC Company $21.50, 25 shares, -16.0% Return); (DEF Company $7.25, 80 shares, -14.0% Return); and (XYZ Company $19.25, 130 shares, 16.4% Return) ;"

9.0%

9.4%

0.5%

1.9%

10.3%

8.5%

Insufficient data provided to calculate this statistic

Answer 1

Given about a portfolio, its assets and return on each asset.

Company	Price	Share	Return	investment value = price*share	dollar return on each investment = investment value*return rate
FIN340	31.8	50	15.50%	1590	246.45
ABC	21.5	25	-16%	538	-86
DEF	7.25	80	-14%	580	-81.2
XYF	19.25	130	16.40%	2503	410.41
			Total investment	5210	489.66

From the table, we can see total investment value = sum of investment in each stock = $5210

dollar return on each stock = value in each stock*its return rate

Total return = sum of dollar return on each investment

So,  Portfolio Return = Total return/Total investment = 489.66/5210 = 9.4%

Option B is correct.