Ed Lawrence Has $100,000 Invested

question 389

Multiple Choice

Ed Lawrence has $100,000 invested. Of that, $30,000 is invested in Tim Hortons stock, $25,000 is invested in T-bills, and the remainder is invested in corporate bonds. Which of the following is NOT correct regarding his portfolio weights? (All values are current market values.)

• A) Ed has 30% of his portfolio invested in stocks.
• B) Ed has 45% of his portfolio invested in corporate bonds.
• C) Ed has 70% of his portfolio invested in assets other than stocks.
• D) Ed has 70% of his portfolio invested in risk-free assets.
• E) If Ed sells his corporate bonds and buys Suncor stock with the proceeds, he will end up with 75% of his portfolio invested in stocks.

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Definitions:

Bylaws

Rules and regulations that govern a corporation’s internal management.

Affiliated Directors

Members of a company's board who have a relationship with the company outside of their directorship, potentially through business, family, or significant financial ties.

Business Contacts

Individuals or entities with whom a person or company engages for the purpose of conducting business or exchanging information.

Corporation

A corporation is a legal entity that is separate and distinct from its owners, capable of owning property, entering into contracts, and being sued.