A Portfolio Consists of the Following Two Funds

question 53

Multiple Choice

A portfolio consists of the following two funds. What is the expected return on fund A?

• A) 12.0 percent
• B) 13.3 percent
• C) 13.7 percent
• D) 14.5 percent
• E) 15.7 percent

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Definitions:

Pre-acquisition Entry

A journal entry made to record the financial impacts of acquiring company interest or assets before full acquisition or control is obtained.

Declared Dividend

A payment authorized by a company’s board of directors to be distributed among shareholders out of the company’s earnings.

Business Combination Entries

The journal entries recorded to account for the consolidation of entitles under common control, reflecting their assets, liabilities, and any non-controlling interest.

Fair Value

Fair value is an estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.