The price of Microsoft is $30 per share and that of Apple is $58 per share. The price of Microsoft increases to $39 per share after one year and to $42 after two years. Also, shares of Apple increase to $66 after one year and to $71 after two years. If your portfolio comprises 100 shares of each security, what is your portfolio return over year 1 and year 2? Assume no dividends are paid.
A) 19.32%, 7.62%
B) 28.01%, 8.38%
C) 23.18%, 11.43%
D) 22.22%, 13.71%

Question

Quizplus · Accepted Answer

A) Compute portfolio values at year 0, year 1, and year 2. Then calculate the annual returns from those portfolio values. 11ea84dc_f52f_70fa_9a63_3fea081ddf26_TB1316_00_TB1316_00 11ea84dc_f52f_70fb_9a63_4939f1ec963c_TB1316_00_TB1316_00 11ea84dc_f52f_980c_9a63_572132be85fe_TB1316_00_TB1316_00 11ea84dc_f52f_980d_9a63_99c6f3b37490_TB1316_00_TB1316_00 11ea84dc_f52f_980e_9a63_679f37098dae_TB1316_00_TB1316_00

The Price of Microsoft Is $30 Per Share and That