You Are Given the Following Information About a Portfolio You

question 29

Multiple Choice

You are given the following information about a portfolio you are to manage. For the long term, you are bullish, but you think the market may fall over the next month. $\begin{array}{lc} \text { Portfolio Value} &\$ \quad \text { 1million } \\ \text { Portfolio's Beta} &0.60\\ \text { Current S\&P500 value } &1400\\ \text {Anticipated S\&P500 Value } &1200\\\end{array}$
If the anticipated market value materializes, what will be your expected loss on the portfolio?

• A) 14.29%
• B) 16.67%
• C) 15.43%
• D) 8.57%
• E) 6.42%

Understand how to calculate and interpret the margin of safety in both dollars and as a percentage of sales.

Understand the concept and calculation of the degree of operating leverage.

Analyze the effects of sales mix changes on the overall break-even point for a company.

Construct and analyze contribution format income statements under different scenarios.

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Definitions:

High-sugar foods

Foods that contain a significant amount of sugar, often contributing to unwanted calories and potential health issues like obesity.

High-fiber foods

Foods that are rich in dietary fiber, which aids in digestion and is associated with numerous health benefits.

High-iron foods

foods that are rich in iron, essential for the production of hemoglobin and preventing anemia; these include red meat, beans, and fortified cereals.

Fat and cholesterol

Substances found within the body and foods that are essential for health but can lead to heart disease when consumed in excess.