Ask Question
BusinessBusiness
8 December, 11:32

You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio?

Stock Amount Beta Expected Return

Apple $1,000 2.40 10.50%

Microsoft $7,000 0.73 16.90%

Ford $6,000 1.95 15.75%

Time Warner $6,000 1.27 11.80%

+3
Answers (1)
  1. 8 December, 14:00
    0
    Answer: Expected return of the portfolio = 14,70%

    Explanation: First we must add the amounts to calculate the total capital:

    1000 + 7000 + 6000 + 6000 = $20000

    The performance of a portfolio is given by the sum of each individual expected return weighted by its weight in capital.

    Therefore we must calculate the weight (w) of each type of action:

    W (apple) = 1000 / 20000 = 0,05

    W (microsoft) = 7000 / 20000 = 0,35

    W (ford) = 6000 / 20000 = 0,30

    W (time warner) = 6000 / 20000 = 0,30

    Expected return of the portfolio : (0,1050. 0,05) + (0,1690. 0,35) + (0,1575. 0,30) + (0,1180. 0,30) = 0,14705 = 14,70%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
A firm must decide whether to make a compo - nent part in-house or to contract it out to an in - dependent supplier. Manufacturing the part requires a nonrecoverable investment in special - ized assets.
Answers (1)
Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Department 2's contribution to overhead in dollars is: Dept.
Answers (1)
All things being equal, which will move more easily; a newly polished car or a car that has never been polished
Answers (1)
Given the following dа ta: Cost of materials used $45,000 Direct labor costs 48,000 Factory overhead 39,000 Work in process, beginning 28,000 Work in process, ending 18,000 Finished goods, beginning 28,000 Finished goods, ending 18,000 What is
Answers (1)
A market comprised of only two firms is called a
Answers (1)
New Questions in Business
Which statement is false? A) Land is the primary factor of production used in the production of all goods and services. B) An entrepreneur combines all the factors of production. C) Growth in the economy shifts the PPC left.
Answers (1)
A short-run phillips curve shows an inverse relationship between
Answers (1)
Which of the following types of business usually has the fastest inventory turnover? furniture store hardware store store that sells consumer electronics grocery store
Answers (2)
A Gantt chart is a horizontal bar chart that shows each work activity on a separate line with the bar placed from the early start date to the early finish date for each activity on a timescale. 1. True 2. False
Answers (1)
You run a small auto service shop. Your fixed expenses per week are $1,000 and your average customer invoice is $500 with an associated marginal cost of $300. What is your weekly break-even quantity?
Answers (1)
Home » Business » You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio? Stock Amount Beta Expected Return Apple $1,000 2.40 10.50% Microsoft $7,000 0.73 16.90% Ford $6,000 1.95 15.
Sign Up Forgot Password?