Suppose You Invest in 100 Shares of Merck at $40

question 97

Multiple Choice

Suppose you invest in 100 shares of Merck at $40 per share and 100 shares of Yahoo at $25 per share.If the price of Merck increases to $45 and the price of Yahoo decreases to $22 per share,what is the return on your portfolio?

• A)9.45%
• B)5.39%
• C)3.08%
• D)4.12%

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Definitions:

Market Prices

The prevailing price at which goods, services, or securities are bought and sold in a market.

Brewery

An establishment focused on the production of beer through the fermentation process, which may also serve as a venue for selling and tasting.

Nominal Damages

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty.

Loss of the Bargain

The difference between the value of what was promised in a contract and what was actually delivered, potentially leading to damages in a breach of contract case.