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Asset Return Liabilities Return Asset A 10000 x Liability A 1000 8% Asset B 2000 6% Equity A 2000 4% Equity B 9000 12% Calculate

Asset Return Liabilities Return
Asset A 10000 x Liability A 1000 8%
Asset B 2000 6% Equity A 2000 4%
Equity B 9000 12%

Calculate return on asset A as the weighted average of the return on the other financial instruments.

What is the weight attached to asset B

Asset Return Liabilities and Equity Return
Asset A 10000 15% Liability A 1000 8%
Asset B 2000 6% Liability B -2500 x
Equity A 13500 13%

Calculate return on Liability B as the weighted average of the returns on the other financial instraments.

What is the weight attached to asset A?

Is liability B really a liability? Explain.

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