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You have $1,000 to make investments, which will allocate $350 in stock x, $200 in stock y, and the rest in stock z. the expected returns of these stocks are 8 percent, 16 percent, and 11 percent, respectively. what is the expected return of the portfolio?

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W0lf93
Amount invested in stock x = $350 Amount invested in stock y = $200 Total invested in stock x and y = 350 + 200 = 550 The remaining amount = 1000 - 550 = 450 So Amount invested in stock z = $450 Expected return from stock x is 8 %. That is 350 * 8/100 = 28 Expected return from stock y is 16 %. That is 200 * 16/100 = 32 Expected return from stock z is 11 %. That is 450 * 11/100 = 49.5 So, the return from the portfolio = 28 + 32 + 49.5 = $ 109.5

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