Imagine you invest in the following stocks: $11,600 of A, $7,800 of B, $14,900 of C, and $3,200 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?
You start with $37500, 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 $37 500?