Your portfolio has three asset classes. u. s. government t-bills account for 47% of the portfolio, large-company stocks constitute another 38%, and small-company stocks make up the remaining 15%. if the expected returns are 4.08% for the t-bills, 11.38% for the large-company stocks, and 15.53% for the small-company stocks, what is the expected return of the portfolio?

Expected return of the portfolio = 8.57%

Explanation:

The expected return of the portfolio is the weighted average return of all assets in that portfolio, which is calculated as below:

The expected return of the portfolio = (Weight of U.S. government T-bills x Return of U.S. government T-bills) + (Weight of large-company stocks x Return of large-company stocks) +  (Weight of small-company stocks x Return of small-company stocks)

= 47% x 4.08% + 38% x 11.38% + 15% x 15.53% = 8.57%

ER = 8.57%

Explanation:

The total expected return can be calculated by computing return with weights of the portfolio.

Expected Return

= W1*R1 + W2*R2 +W3*R3

where W1 is the weight of 1 asset and subsequent assets as W2 and W3.

R1 = return of assets and subsequent assets as R2 and R3,

ER = 0.47(0.0408) + 0.38(0.1138) + 0.15(0.1553)

ER = 8.57%

Hope that helps.

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.

answer; tech (a) is correct;