Suppose you invest in 100 shares of harley- davidson (hog) at $40 per share and 230 shares of yahoo(yhoo) at $25 per share. if the price of harley-davidson increases to $50 and the price of yahoo decreases to $20 per share, what is the return on your portfolio a) -10.50%, b) -5.20%, c) 12.25%, d) -1.54%

option (D) - 1.54%

Explanation:

Number of share of Harley- Davidson (HOG) = 100

Number of share of Yahoo(YHOO) = 230

Purchase price of share of Harley- Davidson (HOG)  = $40 per share

Purchase price of of share of Yahoo(YHOO)  = $25 per share

Final price of the share  of Harley- Davidson (HOG) = $50

Increase in price of the share  of Harley- Davidson (HOG) = $50 - $40 = $10

Final price of the share  of Yahoo(YHOO) = $20

Increase in price of the share  of Yahoo(YHOO) = $20 - $25 = - $5

here, negative sign means the loss

Now,

Total amount invested = 100 × $40 + 230 × $25

= 4,000 + 5,750

= $9,750

also,

Total net gain from shares = $10 × 100 - $5 × 230

= 1,000 - 1,150

= -150

return on your portfolio =

=

= - 1.538% ≈ - 1.54%

option (D) - 1.54%

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it is d i just took the test