Year-to-date, Yum Brands had earned a 4.40 percent return. During the same time period, Raytheon earned 4.93 percent and Coca-Cola earned - 0.60 percent. If you have a portfolio made up of 40 percent Yum Brands, 40 percent Raytheon, and 20 percent Coca-Cola, what is your portfolio return?

Question

Business

Josephine Meza

8 February, 08:59

Year-to-date, Yum Brands had earned a 4.40 percent return. During the same time period, Raytheon earned 4.93 percent and Coca-Cola earned - 0.60 percent. If you have a portfolio made up of 40 percent Yum Brands, 40 percent Raytheon, and 20 percent Coca-Cola, what is your portfolio return?

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Answers (1)

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Ernest Pham · Answer 1

3.612%

Explanation:

The computation of portfolio return is shown below:-

Portfolio return = (Return of Y * Weight of Y) + (Return of R * Weight of R)

+ (Return of C * Weight of C)

= (4.40% * 40%) + (4.93% * 40%) + (-0.60% * 40%)

= 1.76% + 1.972% - 0.12%

= 3.612%

Therefore for computing the portfolio return we simply applied the above formula.