Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment. The investment in stock 1 is $9,000 and its return is 18%. The investment in other stock is $21,000 and its return is 8%.

Question

Rebecca invested $9,000 in a stock that has an expected return equal to 18 percent and $21,000 in a stock with an 8 percent expected return. What is the portfolio’s expected return?

Answer 1

Question

Chapter 8, Problem 6PROB

Summary Introduction

Expected rate of return is the anticipated profit or loss of an investment to be received by the investor. It is computed by expecting the probabilities of a maximum range of returns on an investment.

The investment in stock 1 is $9,000 and its return is 18%. The investment in other stock is $21,000 and its return is 8%.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Rebecca invested $9,000 in a stock that has an expected return equal to 18 percent and $21,000 in a stock with an 8 percent expected return. What is the portfolio’s expected return?

You own a portfolio that has $16,000 invested in Stock A and $17,000 invested in Stock B. The expected returns on these stocks are 14.9 percent and 9.7 percent, respectively. What is the expected return on the portfolio?

You own a portfolio that has $2,045 invested in Stock A and $4,096 invested in Stock B. If the expected returns on these stocks are 14 percent and 8 percent, respectively, what is the expected return (in percent) on the portfolio? Answer to two decimals.