5

Edwin, examining the returns of a 3 asset portfolio, needs to find the portfolio return, and has assembled the following information: expected market return = 17.20 expected Risk-free rate = 2.15 expected return Stock X = 2.70 expected return Stock Y = -15.00 expected return Stock Z = 29.05 weight in portfolio of Stock X = 0.25 weight in portfolio of Stock Y = 0.22 What is the portfolio return?

Select one:

a.

8.49%

b.

7.04%

c.

insufficient information to determine

d.

1.48%

e.

12.77%

f.

5.58%

g.

-2.63%