The Price of BHP Is $40 Per Share and That

question 43

Multiple Choice

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

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Definitions:

Market Segmentation

The process of dividing a broader market into smaller, distinct groups of consumers who have common needs or characteristics.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts these processes have on the consumer and society.

Marketing Strategies

Plans of action designed to promote and sell a product or service by identifying target markets and developing a mix of marketing tactics to reach them.

Accomplished

Refers to successfully achieving a goal or completing a task to a high standard.