Calculate the expected return on the portfolio[E (R)] of the following assets if you invest 20% in

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Calculate the expected return on the portfolio [E (R)] of the following assets if you invest 20% in asset 1, 30% in asset 2, and 50% in asset 3.  How and why will your answer change if you shift 20% of invested funds from the least risky (asset 3) to the most risky (asset 1) asset?
Asset                             Return
1. 10%
2.  7%
3.  6%

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

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