Let X = total funds.
GM annual earnings = 0.7 * 0.15 X = 0.105X
Lucent annual earnings = 0.3*0.10 X = 0.03X
Total earnings = 0.135 X
The expected return is 13.5% of the investment portfolio amount (X).
They only want the percent return. The actual dollar amount depends upon X.
If you invest 30% of your funds in Lucent stock, with an expected rate of return of 10%, and the remainder in GM stock, with an expected rate of return of 15%, the expected return on your portfolio is
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