Warren is an investor who started investing in the market a year ago. He invested $100,000 in XYZ stock, ABC stock for $300,000, and deposited $100,000 in a bank account. It has been a year and since then, the price of stock XYZ has appreciated by 10% and the return of stock ABC is 7%. The bank account has an annual interest rate of 4%. What is the return of his entire portfolio?
Let's use two methods to calculate the portfolio return.
Method 1: Using the definition of return.
The portfolio ending value is $
.
The return is
%
Please enter your answer on return as a percentage. Round your answer to two decimal places. For example, if your answer is that the portfolio return is 5.25%, please enter 5.25. Do not add the percentage symbol %.
Method 2: Using the weighted-average method.
The portfolio weights are
,
,
Please remove all the trailing zeros.
The return is
%.