What Is the Expected Rate of Return on a Portfolio

question 73

Multiple Choice

What is the expected rate of return on a portfolio 18% of which is invested in an S&P 500 Index fund, 65% in a technology fund, and 17% in Treasury Bills. The expected rate of return is 11% on the S&P Index fund, 14% on the technology fund and 2% on the Treasury Bills.

• A) 10.25%
• B) 8.33%
• C) 11.42%
• D) 9.00%

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Definitions:

Interest Rates

represent the cost of borrowing money or the return on savings, playing a crucial role in influencing economic activity and financial decisions.

Planned Investment

The expenditure by businesses on capital goods that are intended to increase their productive capacity in the future.

Real Gross Domestic Product

The evaluation of a nation's economic output after adjusting for any price variations, including inflation or deflation, to reveal the genuine quantity of produced goods and services.

Money Supply

The sum of all available money in an economy at a given moment, encompassing cash, coins, and bank account balances.