You believe that you can earn 2% more on your portfolio if you engage in full time stock research.However,the additional trading costs and tax liability from active management will cost you about 0.5%.You have a $800,000 stock portfolio.What is the most you can afford to spend on your research?
A) $4,000
B) $8,000
C) $12,000
D) $16,000

Question

Quizplus · Accepted Answer

The net gain from research is 1.5% (2% - 0.5%). On an $800,000 portfolio, this is $12,000 (0.015 * $800,000).

You Believe That You Can Earn 2% More on Your