The Lake Corp

question 1

Multiple Choice

The Lake Corp. takes a single ingredient and makes it into three different products. The joint costs of buying the ingredient and dividing it into these three products are $10,000 per metric ton of the ingredient. From every metric ton of ingredients, the company produces 400 kilograms of Product A, 400 kilograms of Product B, and 200 kilograms of Product C. Product A can be sold at the split-off point for $10 per kilogram, B can be sold for $15 per kilogram, and C can be sold for $20 per kilogr

• A) 2000
• B) 3333
• C) 4000
• D) 4285

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Definitions:

Expected Return

The expected return is the anticipated average return on an investment, considering both the probability of each outcome and the return of each outcome.

Risk-free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.

Market Return

The total return of a market index based on the collective performance of its constituents, typically over a specified time frame.

Portfolio Expected Return

Portfolio Expected Return is the weighted average of the expected returns on the assets included in a portfolio.