Exercises / Finance and business maths · 13 of 14
Portfolio return, weighted by size
A plain average treats a $1,000 holding and a $100,000 holding the same. A weighted average multiplies each return by its weight: SUMPRODUCT(weights, returns) / SUM(weights).
Your taskIn F2, use SUMPRODUCT and SUM to work out the portfolio return: each holding’s return in C2:C6 weighted by its value in B2:B6.
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| Row | A | B | C | D | E | F |
|---|---|---|---|---|---|---|
| 1 | Holding | Value | Return | Measure | Value | |
| 2 | US stocks | $60,000.00 | 12% | Portfolio return | ||
| 3 | Intl stocks | $25,000.00 | 7% | |||
| 4 | Bonds | $30,000.00 | 3.5% | |||
| 5 | Gold | $5,000.00 | -2% | |||
| 6 | Cash | $10,000.00 | 4.5% |