Question

The expression 1.08 + 1.02b predicts the end- of the year value if a financial portfolio where S is the value of the stocks and B is the value of bonds in the portfolio at the beginning of the year

What is the predicted end-of value of a portfolio that begins the year with $200 in stocks and $100 in bonds?

Answer 1

1.08s + 1.02b

1.08(200)+1.02(100)

216+102=318

Explanation:

Answer 2

We have

Stock = $200

Bonds = $100

Substitute these values into 1.08s+1.02b, where 's' is stock and 'b' is bond

.() + .() =

Predicted end of year value is $318