Suppose You Invest $15,000 in Merck Stock and $25,000 in Home

question 71

Multiple Choice

Suppose you invest $15,000 in Merck stock and $25,000 in Home Depot stock.You expect a return of 16% for Merck and 12% for Home Depot.What is the expected return on your portfolio?

• A)13.50%
• B)14.00%
• C)13.75%
• D)14.50%

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Definitions:

High-Low Method

A technique used in cost accounting to estimate fixed and variable costs associated with production or operations.

Variable Cost

Costs that change directly and proportionally with the level of output or production volume, such as raw materials and direct labor.

Electrical Cost

The expense associated with the consumption of electricity in a business or home.

Comparative Income Statement

A financial statement that presents the revenues, expenses, and net income for multiple periods side by side for comparison.