Busıness Fınance I Deneme Sınavı Sorusu #846444

Suppose that you invest 30% of your money in security A, %50 in security B and the rest in security C. The expected returns of A, B and C are given as 10%, 8% and 5% respectively. What is your expected rate of return for this investment?


10%

9%

8%

7%

6%


Yanıt Açıklaması:

Expected return of a portfolio is the weighted average of returns of securities in that portfolio. The share of C=1-0.5-0.3=0.2

Thus, expected return will be:

ER=0.3*10+0.5*8+0.2*5=3+4+1=8%

 

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