Suppose You Own 100 Shares of CyberChase Ltd

question 101

Multiple Choice

Suppose you own 100 shares of CyberChase Ltd.and 200 shares of NetSurfer Ltd.At the time of purchase, the stocks of CyberChase and NetSurfer were trading at $25 and $15 per share, respectively.What is the expected value of the portfolio if CyberChase has an expected return of 8.0% and NetSurfer has an expected return of 13.0%?

• A)$6,065
• B)$6,090
• C)$7,095
• D)$7,270

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Definitions:

Explanatory Power

The ability of a statistical model to account for a variation in a dependent variable through one or more independent variables.

Benchmark Error

A discrepancy between the performance of a benchmark index and the target performance of a fund or investment strategy it is supposed to represent.

Market Proxy

A representative asset or a portfolio that is considered to represent the characteristics of a particular market segment, often used in academic studies and financial analyses.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.