You hold a portfolio with the following securities: Security Portfolio weight Beta Expected Return Driscol Corporation...

You hold a portfolio with the following securities:

Security	Portfolio weight	Beta	Expected Return
Driscol Corporation	29%	3.3	38%
Evening Corporation	49%	1.7	20%
Frolic Corporation	22%	0.2	5%

The expected portfolio return is Blank 1. Calculate the answer by read surrounding text. %. Round to the nearest 0.01% (drop the % symbol). E.g., if your answer is 21.93%, record it as 21.93.

Expert Solution

Expected portfolio return is weighted average of the return of the constituents of the portfolio.

E(R) = w1 * r1 + w2 * r2 + w3 * r3

E(R) = 29% * 38% + 49% * 20% + 22% * 5%

E(R) = 11.02% + 9.80% + 1.10%

E(R) = 21.92%

jeff jeffy answered 2 years ago

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