A portfolio is invested 15 percent in Stock G 55 percent in

A portfolio is invested 15 percent in Stock G, 55 percent in Stock J, and 30 percent in Stock K. The expected returns on these stocks are 6 percent, 20 percent, and 27 percent, respectively. What is the portfolio\'s expected return??

Solution

The portfolio expected return = Weight of Stock G * Return of Stock G + Weight of Stock J * Return of Stock J + Weight of Stock K * Return of Stock K = 15% * 6% + 55% * 20% + 30% * 27% = 20%

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