BA II Plus: Portfolio Return Step by Step

TL;DR

Portfolio return is a weighted average. The fastest BA II Plus workflow is to multiply each weight by its return, store subtotals, and sum them.

Formula Reference

E(Rp) = sum[w_i x E(R_i)]

BA II Plus Keystrokes

1. Multiply weight 1 by return 1
2. Press STO 1
3. Multiply weight 2 by return 2
4. Press + RCL 1
5. Continue for all assets
6. Convert the final decimal to percent if needed

Worked Example

• Portfolio weights are 40 percent and 60 percent. Expected returns are 8 percent and 12 percent.
• Return = 0.40 x 8 + 0.60 x 12 = 10.4 percent.
• Use STO/RCL to reduce transcription errors.

Common Mistakes

• Using percentages as decimals for one input and whole numbers for another.
• Forgetting to check that weights sum to 100 percent.
• Using simple average instead of weighted average.

Related Guides

• CFA Level I Portfolio Management Calculations - Expected return, portfolio risk, CAPM, Sharpe ratio, and performance measurement calculations.
• CFA Level I Portfolio Management Formula Sheet - Public formula sheet for expected return, variance, CAPM, Sharpe ratio, and performance measurement.
• BA II Plus: CAPM Step by Step - Calculate required return with CAPM using BA II Plus arithmetic and memory keys.