Problem:
You want to create a $100,000 portfoloio that consists of three stocks. Curently, you own 40,000 shares of stock A, 20,000 shares of stock B and 40,000 shares of stock C. The expected return for stock A is 5 percent, stock B is 20 percent and stock C is 15 percent.
Requirement:
Question: What is the expected rate of retrn for the protfolio?
A. 9 percent
B. 10 percent
C. 12 percent
D. 13 percent
Note: Solve the problem and show all work.