Use the Table for the Question(s)below

question 27

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns, volatilities and correlations:

-A share market comprises 5 000 shares of company A and 2 000 shares of company B. Assume the share prices for companies A and B are $20 and $35, respectively. What is the capitalisation of the market portfolio?

• A)$165 000
• B)$170 000
• C)$150 000
• D)$185 000

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Definitions:

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term contracts proportionally to the amount of work completed.

Extractive Industry

Industries involved in the extraction of natural resources from the earth, such as mining, drilling for oil, or logging.

Allowance Method

A method of accounting for bad debts that involves estimating and recording the amount of uncollectible accounts receivable.

Direct Write-Off Method

An accounting method where uncollectible accounts receivable are directly written off against income at the time they are deemed non-recoverable.