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    Basic concepts in Finance

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    Karen purchased a stock for $40 last year. She found out today that she had a -75% return on her investment. Which of the following must be true?

    A. The stock is worth $10 today.
    B. The stock is worth $30 today.
    C. The stock paid no dividends during the year.
    D. Both A and C must be true.

    You invested $15,000 in a portfolio with an expected return of 10 percent and $10,000 in a portfolio with an expected return of 16 percent. What is the expected return of the combined portfolio?

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    https://brainmass.com/economics/finance/determining-expected-return-combined-portfolio-464722

    Solution Preview

    Karen purchased a stock for $40 last year. She found out today that she had a -75% return on her investment. Which of the following must be true?

    Current Price=$40*(1-75%)=$10

    This is possible only when no dividend is paid, as ...

    Solution Summary

    There are two problems. Solution to first problem depicts the steps to estimate the current price of a stock. Solution to second problem describes the steps to estimate the expected return of the combined portfolio in the given case.

    $2.19