What Is the Expected Return of the Three Stock Portfolio

question 33

Multiple Choice

What is the expected return of the three stock portfolio described below? $$\begin{array} { l c c } \text { Common Stock } & \text { Market Value } & \text { Expected Return } \\\hline \text { Ando Inc. } & 95,000 & 12.0 \% \\\text { Bee Co. } & 32,000 & 8.75 \% \\\text { Cool Inc. } & 65,000 & 17.7 \%\end{array}$$

• A)18.45%
• B)12.82%
• C)13.38%
• D)15.27%
• E)16.67%

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Definitions:

Portfolio Investment

In international finance, investment in the securities of a foreign company or government.

French Company

A business entity that is registered and operates within France or is formed under French law.

Indirect Quote

An exchange rate expressed as the amount of foreign currency one unit of domestic currency can buy.

Direct Quote

An exchange rate presented as the local currency for each unit of the international currency.