Calculate the expected return on the portfolio [E ( R )] of the following assets
if you invest 20% in asset 1, 30% in asset 2, and 50% in asset 3. How and why
will your answer change if you shift 20% of invested funds from the least risky
(asset 3) to the most risky (asset 1) asset?
Expected Return = Sum (Proportion X Return)
Expected Return = 0.2X10% + 0.3X7% + 0.5X6%
Expected Return = 7.1%
The solution explains how to calculate the expected rate of return on a portfolio