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Basic Question 23 of 23

You have a portfolio of 2 stocks, A and B, and 75% of your capital is invested in A. E(RA) = 15% and E(RB) = 12%. The expected return on the portfolio is ______.

A. 15%
B. 14.25%
C. 14%

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Learning Outcome Statements

calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data

calculate and interpret portfolio standard deviation

describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated

CFA® 2024 Level I Curriculum, Volume 2, Module 1.