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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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
