Question

You own a portfolio consisting of the securities listed below. The expected return for each security is as shown. What is the expected return on the portfolio?

	Number	Price	Expected
	of shares	per share	Return
A	250	$       15.00	11.20%
B	300	$       27.00	16.40%
C	500	$       38.00	8.70%
D	100	$         9.00	24.50%

Select one:

a. 12.0% to 13.0%

b. Less than 10.0%

c. 10.0% to 11.0%

d. 11.0% to 12.0%

e. More than 13.0%

Answer 1

Number	Price	Expected
	of shares	per share	Return	Value of portfolio	Weight of stock	weighted return of stock
A	250	$15.00	11.20%	$3,750.00	0.1181102362	0.01322834646
B	300	$27.00	16.40%	$8,100.00	0.2551181102	0.04183937008
C	500	$38.00	8.70%	$19,000.00	0.5984251969	0.05206299213
D	100	$9.00	24.50%	$900.00	0.02834645669	0.00694488189
			Total	$31,750.00	1	11.41%	Expected return

Hence chooose D) 11% to 12%