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Calculating Portfolio Weights and Expected Returns

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1. What are the portfolio weights for a portfolio that has 145 shares of stock A that sells for $45 per share and 110 shares of Stock B that sells for $27 per share?

2. A portfolio has $2,950 invested in Stock A and $3,700 in Stock B. If the expected returns on these stocks are 8% and 11% respectively, what is the expected return on the portfolio?

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Solution Summary

Solutions depict the methodology to calculate portfolio weights and expected returns in the given cases.

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Solution in excel format is attached.

Problem 1:
Value of Stock A=Va=145*45=$6,525
Value of Stock B=Vb=110*27=$2,970
Total value ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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