A Stockbroker Placed the Following Order for a Customer

question 14

Multiple Choice

A stockbroker placed the following order for a customer:
• 50 shares of Kaiser Aluminum at $104 a share
• 100 shares of GTE at $25.25 a share
• 20 shares of Boston Edison at $9.125 a share
What is the weighted arithmetic mean price per share?

• A)$25.25
• B)$79.75
• C)$103.50
• D)$46.51

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Definitions:

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Projects

Planned sets of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Risk Premium

A risk premium is the additional return expected by an investor for taking on a higher level of risk, compared to a risk-free investment.

Expected Return

The average return anticipated on an investment based on its historical or probable future earnings.