CFA Practice Question

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CFA Practice Question

Assume a portfolio composed of 25% stocks (S) and 75% bonds (B). The expected return from stocks is 7.9% and the expected return from bonds is 4.5%. What is the expected return of this portfolio?

A. 3.38%
B. 5.35%
C. 6.32%
Correct Answer: B

The expected return for this portfolio is E(R) = 0.25 x 7.9 + 0.75 x 4.5 = 5.35%.

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