Your Retirement Portfolio Comprises 300 Shares of the S&P 500

question 28

Multiple Choice

Your retirement portfolio comprises 300 shares of the S&P 500 fund (SPY) and 100 shares of iShares Barclays Aggregate Bond Fund (AGG) .The price of SPY is $140 and that of AGG is $ 95.If you expect the return on SPY to be 15% in the next year and the return on AGG to be 8%,what is the expected return for your retirement portfolio?

• A)12.52%
• B)11.67%
• C)13.71%
• D)12.25%

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Definitions:

Indefinite Life

An accounting term for assets that are not subject to depreciation due to their perpetual existence or usefulness.

Outstanding Common Stock

Shares that are issued by a company and held by investors, excluding any shares held as treasury stock by the company itself.

Annual Amortization

The systematic reduction of the cost (or other basis) of an intangible asset over a specified time period.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.