At the beginning of the month, you owned $15,500 of General Motors, $4,500 of Starbucks, and $9,000 of Nike. The monthly returns for General Motors, Starbucks, and Nike were 7.10 percent, -1.36 percent, and -0.54 percent. What is your portfolio return?
A) -1.12%
B) 1.17%
C) 2.54%
D) 3.42%

Question

Quizplus · Accepted Answer

First, we need to calculate the individual dollar returns for each stock:

- General Motors: 7.10% x $15,500 = $1,100.50
- Starbucks: -1.36% x $4,500 = -$61.20
- Nike: -0.54% x $9,000 = -$48.60

Next, we need to calculate the total portfolio value at the end of the month:

$15,500 + $4,500 + $9,000 = $29,000

And finally, we can calculate the portfolio return as the weighted average of the individual stock returns:

($1,100.50 - $61.20 - $48.60) / $29,000 = 0.0342 or 3.42%

Therefore, the correct answer is D.

At the Beginning of the Month, You Owned $15,500 of General