Quantitative Methods Q176
176The table below shows weighting and returns of different asset classes comprising a portfolio:
| Asset class | Asset allocation (weight) (%) | Asset class return (%) | Correlation with equities class (%) |
| Equities | 65 | 22 | 100 |
| Bonds | 30 | 8 | 30 |
| Cash and equivalents | 5 | 1 | 25 |
Based on the data given in the table, the portfolio return is closest
to:
to:
- Option : B
- Explanation : The portfolio return is the weighted mean return and is calculated as:0.65 * 22 + 0.30 * 8 + 0.05 * 1 = 16.75.
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