The following table shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. What is your portfolio percentage return? $$\begin{array} { l c c c c }
\hline \text { Company } & \text { Shares } & \begin{array} { c }
\text { Beginning } \
\text { of Year } \
\text { Price }
\end{array} & \begin{array} { c }
\text { Dividend } \
\text { per share }
\end{array} & \begin{array} { c }
\text { End of } \
\text { Year } \
\text { Price }
\end{array} \
\hline \mathrm { W } & 200 & \$ 45.00 & \$ 2.50 & \$ 44.00 \
\mathrm { P } & 200 & \$ 5.00 & \$ 1.00 & \$ 5.25 \
\mathrm {~J} & 400 & \$ 20.00 & & \$ 22.00 \
\mathrm { D } & 200 & \$ 27.00 & \$ 1.25 & \$ 27.50 \
\hline
\end{array}$$
A)3.21 percent
B)4.06 percent
C)7.26 percent
D)8.97 percent

Question

The following table shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. What is your portfolio percentage return? $$\begin{array} { l c c c c } 
\hline \text { Company } & \text { Shares } & \begin{array} { c } 
\text { Beginning } \
\text { of Year } \
\text { Price }
\end{array} & \begin{array} { c } 
\text { Dividend } \
\text { per share }
\end{array} & \begin{array} { c } 
\text { End of } \
\text { Year } \
\text { Price }
\end{array} \
\hline \mathrm { W } & 200 & \$ 45.00 & \$ 2.50 & \$ 44.00 \
\mathrm { P } & 200 & \$ 5.00 & \$ 1.00 & \$ 5.25 \
\mathrm {~J} & 400 & \$ 20.00 & & \$ 22.00 \
\mathrm { D } & 200 & \$ 27.00 & \$ 1.25 & \$ 27.50 \
\hline
\end{array}$$
A)3.21 percent
B)4.06 percent
C)7.26 percent
D)8.97 percent

Quizplus · Accepted Answer

First, let's calculate the total cost of our portfolio at the beginning of the year: 
$$
200	imes45.00 + 200	imes5.00 + 400	imes20.00 + 200	imes27.00 = \$26100
$$
Next, let's calculate the total dividends received during the year: 
$$
200	imes2.5 + 200	imes1.0 + 200	imes1.25 = \$925
$$
Now, let's calculate the value of our portfolio at the end of the year: 
$$
200	imes44.00 + 200	imes5.25 + 400	imes22.00 + 200	imes27.50 = \$28950
$$
Our total percentage return is then: 
$$
\frac{\$28950+\$925}{\$26100} - 1 = 0.0726 = 7.26\%
$$
Therefore, the best choice is (C).

The Following Table Shows Your Stock Positions at the Beginning