What Is the Expected Return of the Three-Stock Portfolio Described

question 4

Multiple Choice

What is the expected return of the three-stock portfolio described below? $\begin{array}{lcc}\text { Common Stock } & \text { Market Value } & \text { Expected Return } \\\hline \text { Alko Inc. } & 25,000 & 38 \% \\\text { Belmont Co. } & 100,000 & 10 \% \\\text { Cardo Inc. } & 75,000 & 16 \%\end{array}$

• A) 21.33%
• B) 12.50%
• C) 32.00%
• D) 15.75%
• E) 16.80%

---

Definitions:

Sold

The completion of a transaction where goods or services are exchanged for payment.

Variable Cost

Variable costs change in proportion to the level of business activity or production volume, such as raw materials and packaging.

Activity Level

Refers to the volume of production or operations within a specific period, influencing costs and operational capacity.

Units

The individual items or products counted for inventory, production, or sales purposes.