Question
Two investment portfolios are shown. Investment Portfolio 1 Portfolio 2 ROR Savings Account $3,500 $1,450 2.80% Government Bond $1,800 $2,200 1.55% Preferred Stock $1,950 $3,700
Two investment portfolios are shown.
| Investment | Portfolio 1 | Portfolio 2 | ROR |
|---|---|---|---|
| Savings Account | $3,500 | $1,450 | 2.80% |
| Government Bond | $1,800 | $2,200 | 1.55% |
| Preferred Stock | $1,950 | $3,700 | 11.70% |
| Common Stock | $1,975 | $1,500 | 8.49% |
Portfolio 1 earns $465.93. Part A: Calculate how much Portfolio 2 earns. Show all work. (5 points) Part B: Using your values from Part A, identify the portfolio that earns the most. What information from the table could be used to justify why that portfolio has higher earnings? (5 points)
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen and Peter Brewer
14th edition
978-007811100, 78111005, 978-0078111006
