The Price of Microsoft Is $40 Per Share and That

question 89

Multiple Choice

The price of Microsoft is $40 per share and that of Apple is $45 per share.The price of Microsoft increases to $45 per share after one year and to $50 after two years.Also,shares of Apple increase to $50 after one year and to $60 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)11.21%,14.53%
• B)9.91%,17.96%
• C)11.76%,15.79%
• D)10.05%,18.76%

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Definitions:

Registration Statement

A statement required by the Securities and Exchange Commission to indicate details about a business selling securities.

Cost of Repair Rule

A legal principle that allows a party suffering from property damage to recover the expenses necessary to restore the property to its pre-damage condition.

Negligent Credentialing

Occurs if a hospital has retained a physician that the governing body of the hospital knew or should have known was incompetent.

Actual Privity

A real or direct relationship between parties, especially in contracts, where both are expressly named and involved.