Use the Table for the Question(s)below

question 73

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns,volatilities,and correlations:
-The expected return of a portfolio that consists of a long position of $10,000 in Wal-Mart and a short position of $2000 in Microsoft is closest to:

• A)21%.
• B)12%.
• C)27%.
• D)18%.

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Definitions:

Net Income

The ultimate earnings of a company, arrived at by taking away all expenses, taxes, and costs from the total income.

Dividends

Earnings distributed by a corporation to its shareholders from its profit.

Annual Amortization

The process of gradually writing off the initial cost of an asset over a period typically corresponding to the asset's useful life.

Investment Balance

The current value of all the investments held by an individual or entity.