Use the Information for the Question(s)below

question 114

Multiple Choice

Use the information for the question(s) below.
Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a 6% interest rate to invest in the stock market.You invest the entire $20,000 in an exchange traded fund (ETF) with a 12% expected return and a 20% volatility.
-The expected return on your investment is closest to:

• A)18%.
• B)20%.
• C)12%.
• D)24%.

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Definitions:

Accounts Payable

Liability accounts listing the amounts a company owes to suppliers for goods or services received on credit.

Salaries Payable

A liability account representing the amount of wages owed to employees for work performed but not yet paid.

Liability Account

A financial accounting term representing the debts or obligations of a company incurred during business operations.

Asset Account

An account on a company's balance sheet that represents the value of all assets that the company owns.