We are given a portfolio of $50,000 containing assets R, J, and K. $25,000 is invested in asset R with an expected return of 12%, $10,000 is invested in asset J with an expected return of 18%, and $15,000 is invested in asset K with an expected return of 8%. We need to find the expected annual return of the entire portfolio.

1. Problem Description

We are given a portfolio of $50,000 containing assets R, J, and K.$25,000 is invested in asset R with an expected return of 12%, $10,000 is invested in asset J with an expected return of 18$15,000 is invested in asset K with an expected return of 8%. We need to find the expected annual return of the entire portfolio.

2. Solution Steps

First, we calculate the return from each asset.

Return from asset R = Investment in R * Return rate of R = $25,000 * 12$25,000 * 0.12 = $3,000$

Return from asset J = Investment in J * Return rate of J = $10,000 * 18$10,000 * 0.18 = $1,800$

Return from asset K = Investment in K * Return rate of K = $15,000 * 8$15,000 * 0.08 = $1,200$

Total return from the portfolio = Return from R + Return from J + Return from K = $3,000 +$1,800 + $1,200 =$6,000$

Total investment = $50,000$

Expected annual return of the portfolio = (Total return / Total investment) * 100% = ($6,000 /$50,000) * 100% = $0.12 * 100$

3. Final Answer

a. 12.00%