Lindsay Kelly Bought 100 Shares of Google, 300 Shares of Microsoft

question 85

Multiple Choice

Lindsay Kelly bought 100 shares of Google, 300 shares of Microsoft, and 500 shares of Nokia in January 2005. The adjusted close prices of these stocks over the next three years are shown in the accompanying table. Which of the following is the weighted aggregate price index for Lindsay's portfolio for 2007, using 2005 as the base year?

• A) 206.32
• B) 177.38
• C) 116.31
• D) 237.53

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Definitions:

Direct Financing Capital Lease

A lease agreement where the lessor purchases an asset and leases it out to the lessee, earning interest revenue over the lease term.

Implicit Rate

The interest rate implied in the terms of a lease, representing the lessor's yield if not explicitly stated.

Financing Income-Leases

Income generated from leasing out assets, under which the lessor retains ownership of the asset and provides the lessee the right to use it for a specific period.

Unearned Financing Income-Leases

Income recognized by a lessor prior to providing the associated services or goods under a lease agreement, which must be earned over the lease term.