The Price of Microsoft Is $37 Per Share and That

question 19

Multiple Choice

The price of Microsoft is $37 per share and that of Apple is $43 per share. The price of Microsoft increases to $42 per share after one year and to $47 after two years. Also, shares of Apple increase to $49 after one year and to $59 after two years. If your portfolio comprises 100 shares of each security, what is your portfolio return in year 1 and year 2? Assume no dividends are paid.

• A) 13.06%, 14.84%
• B) 10.31%, 18.96%
• C) 13.75%, 16.48%
• D) 11.69%, 19.78%

---

Definitions:

Supply and Demand

Economic model that determines the price of a commodity in a market, based on the availability of the commodity (supply) and the desire for it (demand).

Francs

A former currency unit used in France and several other countries before the adoption of the euro, also still used in some parts of Switzerland and Liechtenstein.

Exchange Rate

The exchange rate is the price at which one currency can be exchanged for another, affecting imports, exports, and international investments.

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another.