At the beginning of the month, you owned $6,000 of Company G, $8,000 of Company

Question

At the beginning of the month, you owned $6,000 of Company G, $8,000 of Company S, and $1,000 of Company N. The monthly returns for Company G, Company S, and Company N were 7.25 percent, -1.50 percent, and -.23 percent. What is your portfolio return?

1.84%

5.52%

2.09%

2.99%

A particular security's default risk premium is 4.50 percent. For all securities, the inflation risk premium is 3.25 percent and the real interest rate is 3.50 percent. The security's liquidity risk premium is 1.20 percent and maturity risk premium is 1.75 percent.
The security has no special covenants. What is the security's equilibrium rate of return?

13.00%

2.84%

14.20%

9.70%

On November 27, 2007, The Dow Jones Industrial Average closed at 13,058.44, which was up 265.04 that day. What was the return (in percent) of the stock market that day?

+.020%

+2.07%

-2.07%

-.020%

Explanation / Answer

Company Investment Percentage Return Total return G 6000             40.00 7.25%                2.90 S 8000             53.33 -1.50%               -0.80 N 1000               6.67 -0.23%               -0.02 15000           100.00                2.08

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