An investor invests $4,000 to buy 200 shares of sand corporation, which has an expected return of 24%; $2,000 to buy 100 shares of water corporation, with an expected return of 18%; and $4,000 to buy 400 shares in beach corporation, with an expected return of 28%. what is the expected return on this portfolio?

Expected return = 28%

Explanation:

given data

invests $4,000

share = 200

return = 24%

and

invests = $2000

share = 100

return = 18%

and

invest = $4,000

share = 400

return = 28%

to find out

expected return on this portfolio

solution

we know total investment is

Total investment = 4000+2000+4000

Total investment = 10000

and

Wt. of Sand Corporation shares in the total portfolio= =  0.4

Wt. of Water Corporation shares in the total portfolio= =  0.2

Wt. of Beach Corporation shares in the total portfolio= =  0.4

and

Expected return on the given portfolio is

Expected return = 0.4 × 24% + 0.4 × 18% + 0.4 × 28%

Expected return = 28%

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)