- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 52. Portfolio Risk and Return: Part I
- Subject 1. Major Return Measures
CFA Practice Question
In January 2011 a private investor decided to allocate $2,000 to a gas and electric utilities mutual fund, $5,000 to a small company mutual fund, and $3,000 to a technology stock mutual fund. In 2011, the utilities fund had a return rate of 4.3%, the small company mutual fund had a return rate of 1.4%, and the technology stock mutual fund had a return rate of 8.5%. Find the average rate of return on these investments.
A. 4.11%
B. 4.73%
C. 14.2%
Explanation: The average rate of return is the weighted average.
User Contributed Comments 2
| User | Comment |
|---|---|
| mc25456 | 0.2*4.3%+0.5*1.4%+0.3*8.5% |
| ksnider | thanks for putting the calc up. |