Q7. An investor owns the following three-stock portfolio today. Stock
Market Value
Expected Annual Return
K $4,500 14% L $6,300 9% M $3,700 12% The expected portfolio value two years from now is closest to: A) $16,150. B) $17,975. C) $17,870.
Stock
| Market Value × | Expected Annual Return | = Total
| K | $4,500 × | 1.14 × 1.14 | = 5,848.20 | L | $6,300 × | 1.09 × 1.09 | = 7,485.03 | M | $3,700 × | 1.12 × 1.12 | = 4,641.28 |
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| Total | = 17,974.51 |
An investor owns the following three-stock portfolio. Stock | Market Value | Expected Return | A | $5,000 | 12% | B | $3,000 | 8% | C | $4,000 | 9% |
Q8. The expected return is closest to: A) 10.00%. B) 29.00%. C) 9.67%.
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