I’m having trouble working this problem to find the expected return
I’m having trouble working this problem to find the expected return.
A portfolio is composed of 30% stock, 20% bonds, and 50% mutual funds. The stock is expected to have a 10% return, the bonds a 5% return and the mutual funds a 7% return. What is the expected return of the portfolio?
Expected Return Assets Value Possible Return
10% .30 stock .03
5% .20 bonds .01
7% .50 mutual .04
Expected Return = (.08 / 1) X 100 = 8%
The answer I am getting is close to the possible answers but not the correct one.
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