What would be the expected return of the portfolio, Finance Basics

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A Ltd.'s share gives a return of 20% and B Ltd.'s share gives 32% return. Mr. Gotha invested 25% in A Ltd.'s share and 75% of B Ltd.'s shares. What would be the expected return of the portfolio?

Solution:

Portfolio Return = .25 (20) + .75 (32) = 29%

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