Harold Rawlings has computed the returns he earned last year from each of the stocks he holds in his portfolio. The individual returns and the amounts he had invested in each stock at the beginning of the year are shown in the following table:

a. Compute the return that Harold earned on his portfolio during the year.
b. Harold has decided to keep Danka in his portfolio, even though it has experienced financial difficulties and performed very poorly last year, because he expects a significant turnaround that will generate a 25 percent return next year. Suppose that Harold is correct. Assuming that the returns from the other stocks remain the same as last year computes the return on the portfolio for nextyear.

  • CreatedNovember 24, 2014
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