A portfolio consists of $18,200 in Stock M and $30,900 invested in Stock N. The expected return on these stocks is 10.40 percent and 14.30 percent, respectively. What is the expected return on the portfolio?
a.13.58%
b.11.85%
c.12.85%
d.10.86%
e.12.35%

The correct answer is option (C).

Explanation:

According to the scenario, the given data are as follows:

Stock M = $18,200

Expected Return on Stock M = 10.40%

Stock N = $30,900

Expected return on Stock N = 14.30%

So, we can calculate the expected return on portfolio by using the following formula:

Expected return = Respective return (Stock M) × Respective weights (stock M) + Respective return (Stock N) × Respective weights (stock N)

Here, Total investment= ($18,200 + $30,900) = $49,100

So, by putting the value

Expected Return = (18200/49100 × 10.4) + (30900/49100 × 14.30)

= 12.85% (Approx).

Hence, the expected return on the portfolio is 12.85%.

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!