Piper invested $7,400 in a Certificate of Deposit, $4,980 in a corporate bond, $5,100 in a common stock, and $6,350 in a preferred stock, The COD has a rate of return of 3.4%; the corporate bond is 5.8%; the common stock’s rate of return is –1.9%; and the preferred stock has a rate of return of 4.6%. What is Piper’s weighted mean rate of return?

4.60%

3.90%

2.98%

3.09%

Question

Piper invested $7,400 in a Certificate of Deposit, $4,980 in a corporate bond, $5,100 in a common stock, and $6,350 in a preferred stock, The COD has a rate of return of 3.4%; the corporate bond is 5.8%; the common stock’s rate of return is –1.9%; and the preferred stock has a rate of return of 4.6%. What is Piper’s weighted mean rate of return?

 4.60%

 3.90%

 2.98%

 3.09%

tkhunny · Answer

$\dfrac{Sum\;of\;all\;returns}{Sum\;of\;all\;imvestments} = ??$

anonymous · Answer

$$$7,400 + $4,980 + $5,100 + $6,350 / 3.4% + 5.8% + -1.9% + 4.6%$$

tkhunny · Answer

??  What is that?

What is the return AMOUNT on the COD?

anonymous · Answer

0.034

tkhunny · Answer

No, that is the return RATE.  You need the return AMOUNT.  Give it another go.

tkhunny · Answer

7400*0.034 = ??

anonymous · Answer

251.6

tkhunny · Answer

Okay, now the other three.

anonymous · Answer

The other one I got is 288.84

tkhunny · Answer

The other ONE?  Please read and understand the problem statement.  No mope guessing.  Just move along one piece at a time.

COD: $7,400 * 0.034 = 
CorpBond $4,980 * 0.058 = 
CommStock: $5,100 *  (-0.019) = 
PrefStock: $6,350 * 0.046 = 

Calculate ALL FOUR of those and you will have the total investment income.  Yes, the Common Stock will be negative.

The calculate: $\dfrac{Total\;Investment\;Return}{Total\;Investment}$