The Price of Microsoft Is $25 Per Share and That

question 88

Multiple Choice

The price of Microsoft is $25 per share and that of Apple is $50 per share. The price of Microsoft increases to $36 per share after one year and to $41 after two years. Also, shares of Apple increase to $56 after one year and to $66 after two years. If your portfolio comprises 100 shares of each security, what is your portfolio return over year 1 and year 2? Assume no dividends are paid.

• A) 21.53%, 14.67%
• B) 22.67%, 16.30%
• C) 24.93%, 18.75%
• D) 22.21%, 18.26%

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Definitions:

Behavior

The actions or reactions of an individual, usually in relation to the environment, which can be observed externally.

Outcome

The result or consequence of an action or a series of actions, often evaluated to determine success or progress.

Intent

A purpose or plan that guides an action, representing an individual's determined objective or desired goal.

Accelerated Depreciation

An accounting method that allows for the allocation of larger depreciation amounts in the initial years of an asset's life, reducing its taxable income.