Suppose you own 100 shares of CyberChase Ltd.and 200 shares of NetSurfer Ltd.At the time of purchase, the stocks of CyberChase and NetSurfer were trading at $25 and $15 per share, respectively.What is the expected value of the portfolio if CyberChase has an expected return of 8.0% and NetSurfer has an expected return of 13.0%?
A)$6,065
B)$6,090
C)$7,095
D)$7,270

Question

Quizplus · Accepted Answer

The expected value of the portfolio is given by: 
Expected value = (number of shares of CyberChase × price of CyberChase × expected return of CyberChase) + (number of shares of NetSurfer × price of NetSurfer × expected return of NetSurfer)

Expected value = (100 × $25 × 0.08) + (200 × $15 × 0.13) 
Expected value = $200 + $390 
Expected value = $590

Therefore, the expected value of the portfolio is $590. The closest option is B, $6,090.

Suppose You Own 100 Shares of CyberChase Ltd