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Your portfolio is weighted 63% in a RISKY asset and 37% in the RISK FREE asset. The expected return on RISKY assets is 10% and the RISK FREE rate is 3%. What is EXPECTED RETURN of your portfolio

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abiolataiwo2015

The expected return of your portfolio is 7.41%.

Portfolio expected return

Using this formula

Portfolio expected return=(Risky Asset weight × Risky expected return) + (Risk free Asset weight × Risk free expected return)

Let plug in the formula

Portfolio expected return=(63%×10%)+(37%×3%)

Portfolio expected return=6.3%+1.11%

Portfolio expected return=7.41%

Inconclusion the expected return of your portfolio is 7.41%.

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