Given the Following Information, Calculate the Expected Return of Portfolio

question 60

Essay

Given the following information, calculate the expected return of Portfolio ABC. Expected return of stock A = 10%; expected return of stock B = 15%; expected return of stock C = 6%. 40 percent of the portfolio is invested in A, 40 percent is invested in B and 20 percent is invested in C.

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Definitions:

Theories

Systematically organized principles or explanations that provide understanding, prediction, and control of phenomena.

Reductionism

The approach of analyzing and describing a complex phenomenon in terms of its simplest or most fundamental constituents.

Association

A mental connection or relation between thoughts, ideas, or concepts, often formed through experience or learning.

Innate Ideas

Concepts and knowledge that are argued to be inborn or naturally present in the mind, rather than acquired through experience.