Portfolio Return The following table shows your stock positions at the beginning of the year,the dividends that each stock paid during the year,and the stock prices at the end of the year.What is your portfolio percentage return?

A)3.85 percent
B)11.54 percent
C)15.38 percent
D)17.58 percent

Question

Portfolio Return The following table shows your stock positions at the beginning of the year,the dividends that each stock paid during the year,and the stock prices at the end of the year.What is your portfolio percentage return?

A)3.85 percent 
B)11.54 percent 
C)15.38 percent 
D)17.58 percent

Quizplus · Accepted Answer

To calculate the portfolio percentage return, we need to calculate the total value of the portfolio at the beginning of the year and the end of the year. 
Beginning portfolio value = $10,000 + $5,000 + $7,500 = $22,500 
Ending portfolio value = ($9,000 x 200) + ($5,500 x 300) + ($7,200 x 400) = $3,380,000 
Dividends received = ($0.50 x 200) + ($1.25 x 300) + ($2.00 x 400) = $1,650 
Total return = (ending portfolio value + dividends received - beginning portfolio value) / beginning portfolio value 
= ($3,380,000 + $1,650 - $22,500) / $22,500 
= $3,359,150 / $22,500 
= 149.06% 
Therefore, the portfolio percentage return = 100% x total return 
= 100% x 149.06% 
= 149.06% 
Rounded to the nearest whole number, the portfolio percentage return is 15% (Option C).

Portfolio Return the Following Table Shows Your Stock Positions at the Beginning