An Investor Has Invested $8,000 in Security X with an Expected

question 23

Multiple Choice

An investor has invested $8,000 in Security X with an expected rate of return of 14%; $10,000 in Security Y with an expected rate of 9%; and $2,000 in a risk free asset with a return of 4%. For the portfolio, her expected rate of return is

• A) 10.5%.
• B) 9.7%.
• C) 11.4%.
• D) 12.6%.

---

Definitions:

Rent Revenue

Income received from leasing out property or equipment to another party for a specified term.

Adjusting Entry

An accounting entry made into the books of accounts at the end of an accounting period to record any unrecognized income or expenses for that period.

Unearned Rent

Income received in advance for rental periods that have not yet occurred, recognized as a liability until the service period is completed.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.