You invest 70% of your funds in stock X with an expected return of 16% and a standard deviation of returns of 20%, and 30% of your fund in a risk-free asset with an interest rate of 4%; calculate the expected return on the resulting portfolio:

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 18P
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You invest 70% of your funds in stock X with an expected return of 16% and a standard deviation of returns of 20%, and 30% of your fund in a risk-free asset with an interest rate of 4%; calculate the expected return on the resulting portfolio:

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