You are given the following information about a portfolio you are to manage.For the long term, you are bullish, but you think the market may fall over the next month. What is the dollar value of your expected loss?
A)$142,900
B)$16,670
C)$85,700
D)$30,000

Question

You are given the following information about a portfolio you are to manage.For the long term, you are bullish, but you think the market may fall over the next month.  What is the dollar value of your expected loss?
A)$142,900 
B)$16,670 
C)$85,700 
D)$30,000

Quizplus · Accepted Answer

Since the portfolio manager is bullish in the long-term, it means that he expects the market to go up eventually. However, he thinks that the market may fall over the next month. Therefore, it can be assumed that the manager is not too concerned with short-term losses, but is more concerned about long-term gains. The information given about the portfolio does not give any indication about the size of the portfolio, so it cannot be used to calculate the expected loss. Therefore, the correct answer is choice C, as it is not possible to determine the dollar value of the expected loss based on the information given.

You Are Given the Following Information About a Portfolio You