Use the Table for the Question(s)below

question 72

Multiple Choice

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

-A share market comprises 2 000 shares of company A and 2 000 shares of company B. The share prices for companies A and B are $20 and $10, respectively. What proportion of the market portfolio is comprised of each company?

• A)Company A is 200% and company B is 100%.
• B)Company A is 33.3% and company B is 66.7%.
• C)Company A is 66.7% and company B is 33.3%.
• D)Company A is $40 000 and company B is $20 000.

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Definitions:

Budget Line

The Budget Line is a graphical representation of all possible combinations of two goods that can be purchased with a given income level and prices.

Income Increases

Refers to a rise in the amount of money earned by individuals or households, which can influence their purchasing power and consumption patterns.

Marginal Utility

The supplementary satisfaction or advantage gained upon consuming an extra unit of a good or service.

Football Tickets

Specific passes that allow entry to football (soccer or American football) games.