Fremont Enterprises has an expected return of 12 % and Laurelhurst News has an expected return of 24 %. If you put 56 % of your portfolio in Laurelhurst and 44 % in Fremont, what is the expected return of your portfolio?

= 18.7%

Explanation:

A portfolio is a collection of assets / investment. The return on a portfolio is the weighted average of all the return of the individual assets weighted according to the percentage of total funds allocated to each assets.

Expected return on portfolio:

E (R) = (Wa*Ra) + (Wb*Rb)

Wa = 56%, Wb = 100-56 = 44%

Ra = 12%, Rb = 24%

E (R) = (0.56*24%) + (0.44 * 12%)

= 18.7%