A portfolio has a floor value of $4 million, a market value of $7 million, and a multiplier of 1.5. The portfolio will be 100% invested in bonds when the portfolio value is
A) $12 million
B) $10 million
C) $8 million
D) $4 million

Question

Quizplus · Accepted Answer

The floor value is the minimum value at which the portfolio will be entirely invested in bonds. Since the floor value is $4 million, the portfolio will be 100% in bonds when its value is $4 million.

A Portfolio Has a Floor Value of $4 Million, a Market