Problem 11-8 Calculating Expected Returns [LO 1] A portfolio is invested 29 percent in Stock G, 44 percent in Stock J, and 27 percent in Stock K. The expected returns on these stocks are 10.5 percent, 13 percent, and 18.4 percent, respectively. What is the portfolio’s expected return? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) A portfolio is invested 29 percent in Stock G, 44 percent in Stock J, and 27 percent in Stock K. The expected returns on these stocks are 10.5 percent, 13 percent, and 18.4 percent, respectively. Solution Answer: 13.73% Expected return of a porfolio is the weighted average of the returns of the securities in the porftolio, the weights being the proportion of capital invested in it. Rp = 10.5*0.29 + 13*0.44 + 18.4*0.27 = 13.733.