Charles Invests in a Price-Weighted Portfolio of Two Shares,ABC and XYZ.His

question 20

Multiple Choice

Charles invests in a price-weighted portfolio of two shares,ABC and XYZ.His funds manager sends him a statement of his performance at the end of each year for his tax return.Unfortunately,some of the form was illegible,and all he could discern was that the price-weighted portfolio return was 10%,the returns on ABC and XYZ were 8% and 16%,respectively and that the purchase price of ABC was $10.Given this information,at what price did Charles purchase the shares in company XYZ?

• A) \(\$ 2.50\)
• B) \(\$3.33\)
• C) \(\$ 3.75\)
• D) \(\$ 4.25\)

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Definitions:

Oral Contract

An agreement between parties that is made verbally and is as legally binding as a written contract, though harder to prove.

Medical Services

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Oral Contract

An agreement that is made verbally and not committed to a written document, though still legally binding under many jurisdictions.

Writing

The representation of language in a textual medium through the use of a set of signs or symbols.