Question

Suppose you invest in 220 shares of Johnson and Johnson (JNJ) at $70 per share and 240 sharesof Yahoo (YHOO) at $20 per share. If the price of Johnson and Johnson increases to $80 and theprice of Yahoo decreases to $18 per share, what is the return on your portfolio?A) 12.77%B) 8.51%C) 9.37%D) 10.22%

Answer 1

return = 8.51%

Step-by-step explanation:

given data

Johnson invest = 220 shares

price = $70 per share

yahoo invest = 240 shares

price = $20 per share

Johnson increases = $80

Yahoo decreases = $18 per share

to find out

what is the return on your portfolio

solution

first we get Initial value of portfolio that is express as

Initial value of portfolio = (220 × 70) + (240 × 20)

Initial value of portfolio = $20200

and

Current value will be

Current value = (220 × 80) + (240 × 18)

Current value =$21920

and

return = (Current value - beginning value) ÷ beginning value .............1

put here value

return =
`(21920-20200)/(20200)`

return = 8.51%