Question

What is the expected return on a portfolio which is invested 20% in stock A, 50% in stock B, and 30% in stock C

Answer 1

Answer: 13.5%

Explanation:

The expected return is a weighted average of the portion invested in each individual stock and the expected return of each individual stock.

= (20% * 10%) + (50% * 20%) + (30% * 5%)

= 13.5%