Expected rate of return from portfolio

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Reference no: EM13858196

Create an Excel spreadsheet to organize your answers to the following problem:

A portfolio has been constructed from the following securities: 

 Security      

Expected Return    

 Amount Invested    

A

5%

$40,000

B

18%

$25,000

C

15%

$35,000

A. What is the expected rate of return from this portfolio?

B. If Security B is sold, what will be the expected rate of return on the remaining two-stock portfolio?

C. Without respect to item B above, if the investor buys $50,000 of Security D, with an expected return of 10%, and adds it to the original portfolio, what will be the expected rate of return of the resulting four-stock portfolio? 

D. Without respect to B or C above, if the investor sells $20,000 of Security C, what will be the expected rate of return of the remaining three-stock portfolio? 

Reference no: EM13858196

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