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Portfolio expected return

EXERCISE 01
StockExpected returnSharesPrice
A8%52025
B15%30048
C6%25026
  1. A.Calculate expected portfolio return.

A.

E[RP]=∑iNiPiE[Ri]∑iNiPiE[R_P]=\frac{\sum_iN_iP_iE[R_i]}{\sum_iN_iP_i}
VP=520(25)+300(48)+250(26)=33900V_P=520(25)+300(48)+250(26)=33900
E[RP]=520(25)(0.08)+300(48)(0.15)+250(26)(0.06)33900E[R_P]=\frac{520(25)(0.08)+300(48)(0.15)+250(26)(0.06)}{33900}

10.59%