You own a portfolio that has $2,450 invested in Stock A and $3,250 invested in Stock B. If the expected returns on these stocks are 13 percent and 15 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

You own a portfolio that has $2,450 invested in Stock A and $3,250 invested in Stock B. If the expected returns on these stocks are 13 percent and 15 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

See similar textbooks

Related questions

Q: You own a portfolio that has $2,000 invested in Stock A and $8,000 invested in Stock B. If the…

A: Given: Portfolio consists of Stock A = $2000 Stock B = $8000 The expected return on the stock is 20%…

Q: You own a portfolio that is 28 percent invested in Stock X, 43 percent in Stock Y, and 29 percent in…

A: Portfolio is the collection of securities. portfolio return formula: portfolio return =∑nwn×rn…

Q: You own a portfolio that has $3,000 invested in Stock A and $4,100 invested in Stock B. Assume the…

A: The expected return on portfolio is calculated as weighted proportion of stock multiplied by the…

Q: Example: Suppose you want to invest in one stock and one bond. The expected return and standard…

A: Given information : Asset Weight Expected return Standard deviation Stock 70% 9% 16% Bond…

Q: You own a portfolio that is invested 32% in share A, 43% in share B and the remainder in share C.…

A: Expected return on share A = 11.5% Expected return on share B = 15.2% Expected return on share C =…

Q: ou own a portfolio consisting of 35% Treasury bills and 65% stock Q. The return for Treasury bills…

A: Portfolio weight of T-Bill = 35% Portfolio weight of stock Q = 65% T-Bill return = 3% Stock Q return…

Q: Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common…

A: Considering equal investment in each of the eight stocks of a portfolio, weight for each stock can…

Q: You have a portfolio with a standard deviation of 29% and an expected return of 19%. You are…

A: given, rp=19%σp=29%wp=0.8wstock=0.2

Q: You own a portfolio that is 26 percent invested in Stock X, 41 percent in Stock Y, and 33 percent in…

A: Formula: Expected return of portfolio=∑i=1nWi×ri

Q: Your portfolio consists of115 shares of CSH and 75 shares of EJH, which you just bought at $22and…

A: A portfolio is made of different stocks. The portfolio return depends upon the individual returns…

Q: You own a portfolio that is 17 percent invested in Stock X, 32 percent in Stock Y, and 51 percent in…

A: The expected return of the portfolio can be calculated as the sum of individual weight of stock…

Q: Your portfolio consists of 125 shares of CSH and 60 shares of EJH, which you just bought at $20 and…

A: CSH share= 125 shares @$20 each EJH share= 60 shares @31 per share Initial portfolio weights CSH…

Q: You own a portfolio that is 23 percent invested in Stock X, 38 percent in Stock Y, and 39 percent in…

A: Stock Weight Return X 23% 11% Y 38% 14% Z 39% 16%

Q: You own a stock portfolio invested 30 percent in Stock Q, 20 percent in Stock R, 30 percent in Stock…

A: Stock Q = 30% Stock R = 20% Stock S = 30% Stock T = 20%

Q: A stock has a beta of 1.15 and an expected return of 11.4 percent. A risk-free asset currently earns…

A: Given, Return on risky asset = 11.40% Return on risk free asset = 3.50% Beta of risky asset = 1.15…

Q: Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of…

A: The expected return and beta of portfolio is a weighted calculation of existing portfolio and the…

Q: You are considering investing in three stocks with the following expected returns: Stock A 7%…

A: The expected return of the portfolio= Expected return of stock A x Percentage of the portfolio it…

Q: Of the $10,000 invested in a two-stock portfolio, 30 percent is invested in Stock A and 70 percent…

A: Beta: Beta can be defined as the measure of instability of a separate stock relative to the…

Q: Suppose you have portfolio of four stocks Stock A, B, C and D, Total investment in these stocks is…

A: According to CAPM required rate is equivalent to risk free rate plus market risk premium.

Q: A portfolio is invested 24 percent in Stock G, 39 percent in Stock J, and 37 percent in Stock K. The…

A: Stock Weight Return G 24.00% 10.50% J 39.00% 13.00% K 37.00% 18.00%

Q: You have a portfolio with the following: Stock Number of Shares Price Expected Return W 725…

A: Stock Number of share Price Investment Investment Ratio I II III = I*II IV=III/96250 W 725 46…

Q: a) Assume that you bought 200 stock B in your portfolio for total investment of $1200, now the…

A: a) Capital Gain on the stock is computed as follows: Price per share=Total InvestmentNo. of…

Q: Mr. Jones has a 2-stock portfolio with a total value of $540,000. $195,000 is invested in Stock A…

A: Given data: Total value of portfolio = $ 540,000 Total value invested in stock A = $ 195,000 Total…

Q: You have a portfolio that is invested 23 percent in Stock A, 36 percent in Stock B, 41 percent in…

A: Beta of the portfolio is the sum of the product of the weight of the stocks and beta of the stocks.

Q: Based on the table below, you invested 40% on Stock A and B and 20% on Stock Calculate the expected…

A: Expected return The expected return refers to the profit or loss that is anticipated by an investor…

Q: You own a portfolio that has $2,045 invested in Stock A and $4,096 invested in Stock B. If the…

A: Formula:

Q: Currently, the risk-free return is 4 percent, and the expected market rate of return is 11 percent.…

A: In this we have to calculate the beta of portfolio and from that we will get expected return of…

Q: If you have an investment portfolio which is a mix of stock and bonds, with the stocks having a…

A: Information Provided: Stock return = 1.2% Stock weightage = 30% Bond return = 3.5% Bond weightage =…

Q: Calculate the expected return on the following portfolio, consisting of Stocks A, B & C: Stock A:…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: You have recommended a portfolio comprising of 65 percent in a bond index and 35 percent in a stock…

A: Portfolio refers to the collection of all individual securities or investments held by a person or…

Q: You own a stock portfolio invested 35 percent in Stock Q, 30 percent in Stock R, 20 percent in Stock…

A: given, wq= 0.35 wr= 0.3 ws= 0.2 wt= 0.15 betaq= 0.92 betar= 1.25 betas= 1.09 betat= 1.27

Q: What is the portfolio’s expected return?

A: Portfolio expected return is the return that is expected to generate from a portfolio. Generally…

Q: If the expected rate of return on the market portfolio is 17% and T-bills yield 7%, what must be the…

A: Capital assets price model gives the required rate on stock considering the risk free rate and…

Q: Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A…

A: The formula to calculate the expected risk on the portfolio (standard deviation of the portfolio…

Q: You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the…

A: The standard deviation of a portfolio is the total risk of the portfolio arising out of expected…

Q: TABLE 1. Fim Portfolio Data - Expedel returns on cOMmponent stocks (%) in fundion of the state of…

A: We should first compute the expected return of the portfolio and its standard deviation. Then we…

Q: You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the…

A: Expected return of portfolio = (weight of stock A × Expected return of A) + (weight of stock B ×…

Q: Stock J has a beta of 1.28 and an expected return of 13.56 percent, while Stock K has a beta of .83…

A: Market beta is 1. Beta of Stock J = 1.28 Beta of Stock K = 0.83 Let Weight of Stock J = WJ Let…

Q: You have recently received $400,000 and you are considering investing $250,000 in the WIG and the…

A: The portfolio expected return refers to the weighted average return of the individual securities.…

Q: Assume that you bought 200 stock B in your portfolio for total investment of $1200, now the market…

A: Capital gain is the determination of any profits or gains arises out of sale or transfer of any…

Q: a. You expect an RFR of 10 percent and the market return (RM) of 14 percent. Compute the expected…

A: Part (a)RFR = 10%The market return, RM = 14%The expected return for a stock using CAPM equation is:…

Q: You have $260,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return…

A: The expected return of a portfolio helps the investor to determine the performance of the portfolio.

Q: Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A…

A: The formula to calculate the expected risk on portfolio (standard deviation of the portfolio return)…

Q: You have a portfolio consisting solely of Stock A and Stock B. The portfolio has an expected return…

A: A portfolio is made up of more than one stock. The weight of stocks that make the portfolio adds up…

Q: You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 40 percent in Stock…

A: Portfolio Beta is the total of each stock weightage in the portfolio multiplied by the beta of each…

Q: You own a portfolio that has a total value of $215,000 and invested it is invested in Stock D with a…

A: Given: Total value of investment = $215,000 Stock D beta = 0.86 Stock E beta = 1.39

Q: A portfolio consists of $15,000 in Stock M and $22,900 invested in Stock N. The expected return on…

A: Amount invested in Stock M is $15000, expected return is 8.80% Amount invested in Stock N is $22,990…

Question

You own a portfolio that has $2,450 invested in Stock A and $3,250 invested in Stock B.
If the expected returns on these stocks are 13 percent and 15 percent, respectively, what
is the expected return on the portfolio?(Do not round your intermediate calculations.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Calculation of Expected rate of return on portfolio

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?
Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?
You own a portfolio that has $2,800 invested in Stock A and $3,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively. What is the expected return on the portfolio? (
You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You own a portfolio that has $18,000 invested in Stock A and $17,000 invested in Stock B. The expected returns on these stocks are 15.9 percent and 7.1 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You own a portfolio that is 17 percent invested in Stock X, 32 percent in Stock Y, and 51 percent in Stock Z. The expected returns on these three stocks are 12 percent, 15 percent, and 17 percent, respectively. What is the expected return on the portfolio?
You own a portfolio that is 22 percent invested in Stock X, 37 percent in Stock Y, and 41 percent in Stock Z. The expected returns on these three stocks are 12 percent, 15 percent, and 17 percent, respectively. What is the expected return on the portfolio? Expected return _________%
You own a portfolio that is 23 percent invested in Stock X, 38 percent in Stock Y, and 39 percent in Stock Z. The expected returns on these three stocks are 11 percent, 14 percent, and 16 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.; 32.16.)
You own a portfolio that is 1 percent invested in Stock W, 23 percent invested in Stock X,22 percent in Stock Y , and the rest invested in Stock Z. The expected returns on these three stocks are 3 percent. 15.73 percent, 8.29 percent, and 9.03 percent, respectively. What is the expected return on the portfolio? (Do not round any intermediate calculations. List your answer as a percent, round your final answer to 2 decimal places and enter it in the box below.)
You have a portfolio that is invested 15 percent in Stock A, 48 percent in Stock B, and 37 percent in Stock C. The betas of the stocks are .80, 1.35, and 1.64, respectively. What is the beta of the portfolio?