A Portfolio Contains Three Stocks (Stock A,Stock B,and Stock C)

question 55

Multiple Choice

A portfolio contains three stocks (Stock A,Stock B,and Stock C) .The overall value of the portfolio increased 20 percent during 2010⎯the value of Stock A increased by 15 percent,the value of Stock B increased by 22 percent,and the value of Stock C increased by 30 percent.If 40 percent of the total funds in the portfolio were in Stock A at the beginning of 2010,what was the percent of funds (weight) invested in stock B?

• A) 50%
• B) 30%
• C) 10%
• D) 60%
• E) 40%

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Definitions:

Diminishing Marginal Utility

The principle stating that as a person consumes more of a good or service, the satisfaction gained from each additional unit decreases.

Utility Maximizer

An economic concept referring to consumers who select goods or services in a way that maximizes their total satisfaction or utility.

Utility From Milk

The satisfaction or benefit a consumer receives from consuming milk, assessing its nutritional value and taste preferences.

Optimal Consumption Rule

A guideline suggesting that to maximize utility, consumers should allocate their budget in a way that the last dollar spent on each good or service yields the same level of marginal utility.