Answered

Westonci.ca is the best place to get answers to your questions, provided by a community of experienced and knowledgeable experts. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

The ACE Equity Fund has an expected return E[r] of 11.830% and the ZQR Bond Fund has an expected return E[r] of 6.690%. A portfolio comprised of 3% ACE and 97% ZQR would have an expected return of __________%. (percent, rounded three places after decimal)

Sagot :

Answer:

The answer is "6.8442%".

Explanation:

The expected portfolio return is the total average portfolio return for all stocks

ACE fund weight (wA) =3%

ACE fund (ErA) expected return= 11.830%

Bond fund ZQR weight (wB) = 97%.

The ACE fund (ErB) expected return = 6.690%

Expected portfolio return = [tex](wA \times ErA)+(wB \times ErB)[/tex]

                                          [tex]=(3\% \times 11.830 \% )+(97 \% \times 6.690\%)\\\\= 0.03 \times 0.1183 +0.97 \times 0.0669 \\\\=0.003549+ 0.064893\\\\=0.068442\\\\=6.8442 \%[/tex]

 

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.