What Is the Expected Return of the Three Stock Portfolio

question 22

Multiple Choice

What is the expected return of the three stock portfolio described below?

• A)18.27%
• B)14.33%
• C)16.33%
• D)12.72%
• E)16.45%

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Definitions:

Commercial Substance

Commercial substance is a concept in accounting that indicates a transaction significantly changes the economic situation of the parties involved.

Trade-In Allowance

The amount a seller credits to a buyer when the buyer returns a previously purchased item as part of the payment for a new item.

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain period of time.

Amortized

Gradual reduction of a debt over a period of time through regular payments, which may include portions of both principal and interest.