If you own $20,000 of stock A and $20,000 of stock B, and Stock A has...

If you own $20,000 of stock A and $20,000 of stock B, and Stock A has an expected return of 35% while stock B has an expected return of 15%, what is the expected return of the portfollio?

Expert Solution

Ans 25.00%

Stock	Investment (i)	Return (ii)	InvestmentReturn (i) (ii)
A	20,000.00	35%	7,000.00
B	20,000.00	15%	3,000.00
Total	40,000.00		10,000.00

Expected Return =	(Investment * Return) / Investment * 100
	10000 / 40000 * 100
	25.00%

jeff jeffy answered 2 years ago

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