Question 1142663
company O earned -2.10% return.
company V earned 8% return.
company M earned 6.35% return.


your portfolio contains 40% of company O, 30% of company V, and 30% of company M.


what is the overall composite return of the portfolio?


let x equal the total amount invested in the portfolio.


the return on company O is equal to .4 * x * -2.10%.
the return on company V is equal to .3 * x * 8%.
the return on company M is equal to .3 * x * 6.35%.


the overall composite return would be .4 * x * -2.10% + .3 * x * 8% + .3 * x * 6.35% = 3.465% * x.


to test this out, let x be equal to any random number.


i chose 1000 dollars.


.4 * 1000 = 400
.3 * 1000 = 300
.3 * 1000 = 300


return on 400 = -2.10% = 400 * -2.10 / 100 = -8.4.
return on first 300 = 300 * 8 / 100 = 24.
return on second 300 = 300 * 6.35% = 300 * 6.35 / 100 = 19.05


total return = -8.4 + 24 + 19.05 = 34.65.
34.65 / 1000 = .03465 * 100 = 3.465%.


solution is confirmed to be good.


solution is that the overall composite portfolio return is 3.465%.