You own a portfolio that is invested 32% in share A, 43% in share B and the remainder in share C. The expected returns on shares A, B and C are 11.5%, 15.2% and 8.8%, respectively. What is the expected return on the portfolio? a. 11.71% b. 12.18% c. 12.83% d. 12.42% e. 12.49%

You own a portfolio that is invested 32% in share A, 43% in share B and the remainder in share C. The expected returns on shares A, B and C are 11.5%, 15.2% and 8.8%, respectively. What is the expected return on the portfolio? a. 11.71% b. 12.18% c. 12.83% d. 12.42% e. 12.49%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 10P

See similar textbooks

Related questions

Q: A portfolio consists of $17,000 in Stock M and $27,900 invested in Stock N. The expected return on…

A: Given information: Stock M amount is $17,000 Stock N amount is $27,900 Expected return on Stock M is…

Q: You own a portfolio that has $42,000 invested in Stock A and $11,500 invested in Stock B. If the…

A: To Find: Expected return on portfolio

Q: Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock…

A: Expected return of portfolio = ∑W*R W is weight of stock and r is expected return of stock Standard…

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

A: In this we have to calculate weighted average return of portfolio.

Q: A portfolio consists of $17,600 in Stock M and $29,400 Invested in Stock N. The expected return on…

A: Given:

Q: You have OMR 5,000 to invest in shares of A or B the expected returns and standard deviations of…

A: Expected return of a portfolio is nothing but the overall return expected by investing into…

Q: You own a portfolio that is 25 percent invested in Stock X, 35 percent in Stock Y, and 40 percent in…

A: Portfolio is the collection of different securities. portfolio return formula: portfolio return…

Q: You have $12,260 to invest in a stock portfolio. Your choices are StockX with an expected return of…

A: Return on stock X is 14.2%. Return on stock Y is 8.61%. Let the amount invested in stock X is $A.…

Q: What is the beta of a portfolio consisting of one share of each of the following stocks, given their…

Q: A portfolio is invested 25 percent in Stock G, 55 percent in Stock J, and 20 percent in Stock K. The…

A: The expected return from the portfolio is calculated by multiplying the probability by its…

Q: Mr. Jones has a 2-stock portfolio with a total value of $510,000. $175,000 is invested in Stock A…

A: Computation:

Q: Assume a portfolio is made up of three stocks: Expected Return Investment Beta Stock A 18% $150,000…

A: First weights of each stock in the investment is calculated as investment in stock divided by total…

Q: You have a 2-stock portfolio with an expected return of 12 percent. Stock A has weight of 8 percent.…

A: The Expected portfolio or overall rate of return of the portfolio is the total return that is…

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: 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: What is the expected return for the following portfolio? (State your answer in percent with two…

A: Solution:- Expected return for the portfolio (in percentage) = Summation of (Weight of Asset x…

Q: What is the expected return for the following portfolio? (State your answer in percent with two…

A: The question is related to Expected Return of Portfolio. The expected return of Portfolio is…

Q: EXPECTER RETURN OF A PORTFOLIO please see attatch file

A: Expected return on portfolio is sum of weighted return on individual stocks

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: 2. If a company has a portfolio consisting of 3 stocks as follows: 25 percent, 30 percent, and 45…

A: The return on portfolio is a weighted average of returns on individual assets from which portfolio…

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 have a two-asset portfolio that comprises stocks XX and ZZ. The information related to these two…

A: The Expected return of a portfolio refers to the total return which is expected by the investor…

Q: You have a portfolio with the following: Expected Return Stock Number of Shares Price $ 60 1,075 975…

A: Portfolio return is weighted average return of individual stock return's

Q: Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock…

A: Sharpe ratio = (Return on portfolio - risk free rate) / standard deviation

Q: You own a portfolio that has $2,600 invested in Stock A and $3,700 invested in Stock B. Assume the…

A: The expected return is the return of the portfolio which is the sum of each potential return that is…

Q: A two-share portfolio held by an institutional investor has the following information: Years (t)…

A: We will first calculate the standard deviation of the portfolio including ABC & XYZ and…

Q: a portfolio consisting of 35% Treasury bills and 65% stock Q. The return for Treasury bills is 3%.…

A: In this we have to calculate the weighted return of portfolio and also risk.

Q: Your portfolio consists of two securities. Total value of your portfolio is $120,000. In this value…

A: The beta can be computed using the following formula : Beta=Covariance…

Q: Stock A has an expected return of 10 percent and a beta of 1.0. Stock B has a beta of 2.0. Portfolio…

A: CAPM stands for capital asset pricing model. It explains the relationship between systematic risk…

Q: You have a portfolio with the following: Stock Number of Shares Price Expected Return W 1,000…

A: Portfolio is a bundle of different investments. Investor invest the money in different investment to…

Q: You are currently considering in investing Rs.1.2 million in equity investment portfolio. Your…

A: Expected Return and Standard Deviation of the portfolio help an investor to determine the…

Q: What are the portfolio weights for a portfolio that has 135 shares of Stock A that sell for $48 per…

A: Portfolio is a collection of investments that are financially traded like stocks, bonds,…

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: Portfolio Expected Return. You own a portfolio that has $2,750 invested in Stock A and $3,900…

A: In this question we are required to calculate expected return of our portfolio having two stocks…

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: You are planning to invest in a portfolio consisting of Shares L, M and N. The following table shows…

A: Meaning of Expected return of portfolio-Expected return of portfolio is the return an investor is…

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: A two-share portfolio held by an institutional investor has the following information: Years (t)…

A: To Find: Standard Deviation

Q: The following scenario relates to questions 13-15 Shares A and B have the following characteristics:…

A: There are 3 questions answers will be provided one by one

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 have a portfolio with the following: Stock Number of Shares Price Expected Return $62 14% 1,125…

A: Formulas:

Q: You own a portfolio that consists of $17,800 in Stock X with an expected return of 10.20 percent 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 portfolio (standard deviation of the portfolio return)…

Q: Company A’s stock has an expected return of 0.10 and a standard deviation of 0.25. Company B’s stock…

A: Computation of expected return as follows: Expected Return of the portfolio = (Weight of stock A…

Q: A portfolio consists of $38,312 of Stock A, $42,509 of Stock B, and $11,516 of Stock C. The expected…

A: Data given: Stock Return (%) Investment ($) A 6.85 38312 B 12.08 42509 C 15.92 11516…

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 portfolio that is 32% invested in Stock X, 20% in Stock Y, and 48% in Stock Z. The…

A: Return means the benefits received from the investment made by the investor. If an investor takes…

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…

Q: Stock Investment Expected Return A $ 5,000 12% B 10,000 10 C 15,000 14

A: The expected return for an investment portfolio is the weighted average of the expected return of…

Q: Stock A has an expected annual return of 29% and a volatility of 38%. Stock B has an expected annual…

A: Stock A expected return (Ra) = 29% Stock A volatility (Sa) = 38% Stock B expected return (Rb) = 39%…

Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

11.71%

12.18%

12.83%

12.42%

12.49%

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

VIEW

Step 2

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

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?
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?
You own a portfolio that has $2,600 invested in Stock A and $3,700 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?
You own a portfolio that has $1,720 invested in Stock A and $3,470 invested in Stock B. The expected returns on these stocks are 13.7 percent and 8.0 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 _________%
A portfolio is invested 22 percent in Stock G, 37 percent in Stock J, and 41 percent in Stock K. The expected returns on these stocks are 9.5 percent, 12 percent, and 17.4 percent, respectively. What is the portfolio’s expected return?
You have a portfolio worth $78,500 that has an expected return of 11.9 percent. The portfolio has $17,500 invested in Stock O, $25,300 invested in Stock P, with the remainder in Stock Q. The expected return on Stock O is 18.7 percent and the expected return on Stock P is 11.9 percent. What is the expected return on Stock Q?
A portfolio consists of $15,000 in Stock M and $22,900 invested in Stock N. The expected return on these stocks is 8.80 percent and 12.40 percent, respectively. What is the expected return on the portfolio?