Question

The price of Microsoft is $35 per share and that of Apple is $55 per share. The price of Microsoft increases to $37 per share after one year and to $40 after two years. Also, shares of Apple increase to $67 after one year and to $72 after two years. If your portfolio comprises 100 shares of each security, what is your portfolio return in year 1 and year 2? Assume no dividends are paid.

A B C D

Answer 1

portfolio return in year 1

=(37*100+67*100)/(35*100+55*100)-1

=15.56%

portfolio return in year 2

=(40*100+72*100)/(37*100+67*100)-1

=7.69%

c will be answer