A Stock Market Comprises 2000 Shares of Stock a and 2000

question 49

Multiple Choice

A stock market comprises 2000 shares of stock A and 2000 shares of stock B.The share prices for stocks A and B are $20 and $10,respectively.What proportion of the market portfolio is comprised of each stock?

• A)Stock A is 66.7% and Stock B is 33.3%
• B)Stock A is 33.3% and Stock B is 66.7%
• C)Stock A is $40,000 and Stock B is $20,000
• D)Stock A is 200% and Stock B is 100%

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Definitions:

Present Value

A calculation that determines the current value of a future amount of money or stream of cash flows given a specified rate of return.

Annual Cash Flows

The total amount of money being transferred into and out of a business over one year, considered in terms of liquidity and financial health.

Geothermal Heat Pump

A central heating and/or cooling system that transfers heat to or from the ground, using the earth as a heat source or sink.

Net Present Value

A financial metric that estimates the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows over a period of time.