Question

Josh invested in shares of four different companies at the beginning of the year. At the end of the year the share values had increased or decreased as follows:

SunBlush Technologies Stiller Co. PhotoFinish Co. Cola Company
7.62%
-4.17%
-0.83%
3.70%
For full marks your answers should be given as percents accurate to at least two decimal places.
a) What is the total rate of return if Josh invests the same amount in each company?
Return = 0.00 %
b) What is the total rate of return if Josh invests three times as much in Stiller Co. as in the other companies?
Return 0.00 %
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Answer 1

Answer: a) To calculate the total rate of return if Josh invests the same amount in each company, we need to add up the individual rates of return from each company and divide by the number of companies.

The total rate of return for the four companies is: (7.62% + -4.17% + -0.83% + 3.70%) / 4 = 2.52%

So the total rate of return if Josh invests the same amount in each company is 2.52%.

b) To calculate the total rate of return if Josh invests three times as much in Stiller Co. as in the other companies, we need to multiply the rate of return for Stiller Co. by 3 and add it to the rates of return for the other companies.

The total rate of return for the four companies is: (-4.17% x 3) + 7.62% + -0.83% + 3.70% = -7.32%

So the total rate of return if Josh invests three times as much in Stiller Co. as in the other companies is -7.32%.

It's important to note that the answer may change if the investment amount on each company is different.

Explanation: