Answer:
Expected return on portfolio = 15.97%
Explanation:
The expected return on the portfolio is the weighted average return of all the different stocks making up the portfolio. The weight of the individual stock would be the relative amount invested in each stock as a proportion of the total fund invested.
Total value of the portfolio
$
W= (1,000× $ 57) = 57,000
X = (900 × 34 ) = 30,600
Y = (650× 70) = 45,500
Z = 875 55 = 48,125
Total = 181.225
Total fund value = 181.225
Expected return on Portfolio
(57000
/ 181,225) × 14% + (30600
/181,225)× 18% + (45500
/ 181,225)× 16%
(48,125
/181,225)× 17% =15.97%
Expected return on portfolio = 15.97%
