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The percent return an investor would
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20 Jan 2023, 11:09
20 Jan 2023, 11:09
Expert Reply
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Question Stats:
84% (01:10) correct
15% (01:32) wrong based on 13 sessions
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Quantity A |
Quantity B |
The percent return an investor would expect for investing the amounts listed in in the stocks above |
10.5 % |
A) Quantity A is greater.
B) Quantity B is greater.
C) The two quantities are equal.
D) The relationship cannot be determined from the information given
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Re: The percent return an investor would
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23 Jan 2023, 23:34
23 Jan 2023, 23:34
Expert Reply
OE
The investor invests $100 total. The Weighted Average formula states that the expected return would be equal to (percent invested in X) (expected return of X) + (percent invested in Y)(expected return of Y) + (percent invested in Z)(expected return of Z). Hence, the expected return would be: (40 %)(10 %) + (40%)(8%) + (20%) (15%) = (4%) + (3-2%) + (3%) = 10.2%.
A=10.2%
B=10.5%
B is greater
The investor invests $100 total. The Weighted Average formula states that the expected return would be equal to (percent invested in X) (expected return of X) + (percent invested in Y)(expected return of Y) + (percent invested in Z)(expected return of Z). Hence, the expected return would be: (40 %)(10 %) + (40%)(8%) + (20%) (15%) = (4%) + (3-2%) + (3%) = 10.2%.
A=10.2%
B=10.5%
B is greater
gmatclubot
Re: The percent return an investor would [#permalink]
23 Jan 2023, 23:34
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