The Price of Microsoft Is $30 Per Share and That

question 57

Multiple Choice

The price of Microsoft is $30 per share and that of Apple is $50 per share.The price of Microsoft increases to $35 per share after one year and to $40 after two years.Also,shares of Apple increase to $60 after one year and to $70 after two years.If your portfolio comprises 100 shares of each security,what is your portfolio return in year 1 and year 2? Assume no dividends are paid.

• A)18.01%,14.52%
• B)18.75%,15.79%
• C)19.97%,17.85%
• D)18.62%,17.75%

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Definitions:

Additional Unit

Refers to one more quantity of a good or service added to previous totals, often in contexts discussing costs or benefits.

Complementary Resources

Productive inputs that are used jointly with other inputs in the production process; resources for which a decrease in the price of one leads to an increase in the demand for the other.

Price Decrease

A reduction in the monetary value that must be paid for a product or service.

Resource Demand Curve

A graphical representation showing the relationship between the price of a resource and the quantity of that resource that firms are willing to employ, holding all other factors constant.