You Have a Portfolio Which Is Comprised of 70 Percent

question 21

Multiple Choice

You have a portfolio which is comprised of 70 percent of stock A and 30 percent of stock B.What is the expected return on this portfolio?

• A) 7.30 percent
• B) 7.58 percent
• C) 8.03 percent
• D) 8.88 percent
• E) 9.40 percent

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Definitions:

Fixed Asset Account

An account on the balance sheet representing long-term tangible assets held for business use and not expected to be converted to cash in the near term.

Accumulated Depreciation Account

A balance sheet item representing the cumulative amount of depreciation expense charged against an asset over its useful life.

Book Value

Refers to the net value of an asset as recorded on the balance sheet, calculated as the original cost minus accumulated depreciation and impairment.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the company.