Question

You have a portfolio with the following: Stock Number of Shares Price Expected Return W 525 $43 10% X 780 29 15 Y 435 94 11 Z 680 51 14 What is the expected return of your portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

The expected return of your portfolio = 12.42%

Explanation:

At first we have to determine the weight for each of the stock by multiplying number of shares by stock price.

W = 525 x $43 = $22,575

X = 780 x $29 = $22,620

Y = 435 x $94 = $40,890

Z = 680 x $51 = $34,680

Total = $120,765

Stock  Capital                 Weight(W)                  Expected Return(R)     W x R

W         $22,575       (22,575/120,765)=0.1869             10                     1.8693

X          $22,620       (22,620/120,765)=0.1873             15                    2.8095

Y          $40,890       (40,890/120,765)=0.3386            11                     3.7246

Z          $34,680        (34,680/120,765)=0.2872            14                    4.0208

                                                                                                              = 12.42%