You Are Given the Following Information About a Portfolio You

question 41

Multiple Choice

You are given the following information about a portfolio you are to manage. For the long term, you are bullish, but you think the market may fall over the next month. $$\begin{array} { l c } \text { Portfolio Value } & \$ 1 \text { milion } \\\text { Portfolio's Beta } & 0.60 \\\text { Current S\&P500 Value } & 1400 \\\text { Anticipated SEP500 Value } & 1200 \\\end{array}$$ If the anticipated market value materializes, what will be your expected loss on the portfolio?

• A) 14.29%
• B) 16.67%
• C) 15.43%
• D) 8.57%
• E) 6.42%

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Definitions:

Cost of Goods Sold

The expenses directly tied to the creation of the products sold by a business.

Collections

The process of pursuing payments of debts owed by individuals or businesses, typically involving accounts receivable.

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Credit Sales

Sales made by a business where payment is deferred, allowing the customer to pay at a later date.