If You Invested in an Equally Weighted Portfolio of Stocks

question 53

Multiple Choice

If you invested in an equally weighted portfolio of stocks A and C,your portfolio return would be ____________ if economic growth was strong.

• A)17.0%
• B)22.5%
• C)30.0%
• D)30.5%
• E)none of the above

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Definitions:

Effective Rate of Interest

The actual cost of borrowing or the actual return on savings, taking into account the effect of compounding interest.

Straight-Line Amortization

A method of allocating the cost of an intangible asset over its useful life in equal installments.

Cash Paid Out

Money that is spent or disbursed by a business, often related to operating expenses, purchasing assets, or repaying liabilities.

Current Calendar Year

The period from January 1 to December 31 of the present year, used for financial and administrative purposes.