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Hoots : How do you calculate the RRR on a portfolio given component returns? Imagine you invest in the following stocks: ,600 of A, ,800 of B, ,900 of C, and ,200 of D. The required returns on these stocks are 10.7%, 15.4%, - freshhoot.com

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How do you calculate the RRR on a portfolio given component returns?
Imagine you invest in the following stocks: ,600 of A, ,800 of B, ,900 of C, and ,200 of D. The required returns on these stocks are 10.7%, 15.4%, 3.9%, 9.1%, respectively. What is the required rate of return on the portfolio?

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You start with 500, divided into four piles.

Each pile grows by a certain amount over a year; for example the second pile grows by 15.4% of 7800, or 1201.20

What is the total growth in all four piles?

What is the total growth as a percentage of the 500?

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