You Want to Create a $48,000 Portfolio That Consists of Three

question 2

Multiple Choice

You want to create a $48,000 portfolio that consists of three stocks and has an expected return of 14.5 percent.Currently,you own $16,700 of Stock A and $24,200 of Stock B.The expected return for Stock A is 18.7 percent,and for Stock B it is 11.2 percent.What is the expected rate of return for Stock C?

• A)13.67 percent
• B)14.14 percent
• C)15.38 percent
• D)15.87 percent
• E)16.11 percent

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Definitions:

Master Budget

A comprehensive financial planning document that includes all of the organization's financial plans.

Credit Sales

Sales made to customers on credit, allowing them to purchase now and pay later, creating accounts receivable for the company.

Selling Expense

Costs incurred to promote, sell, or distribute a product or service, such as advertising and commission.

Administrative Expense

Costs related to the general administration of a business, including salaries of senior executives, costs of general services, and office supplies among others.