Problem 16-12 (IAA) During 2019, Reminiscent Company bought shares of another entity to be held for...

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Problem 16-12 (IAA) During 2019, Reminiscent Company bought shares of another entity to be held for trading. June 20,000 shares @P100 2,000,000 3,600,000 December 1 30,000 shares @P120 Transactions for 2020 10 January January 20 December 10 Received cash dividend at P10 per share. Received 20% share dividend. Sold 30,000 shares at P125 per share. 1. What is the gain on sale of investment using the FIFO approach? a. 1,150,000 b. 950,000 c. 150,000 d. 550,000 2. What is the gain on sale of investment using the average approach? a. 950,000 b. 750,000 c. 800,000 d. 900,000 3. What total amount should be reported as income from the investment using the FIFO approach? a. 1,650,000 b. 1,450,000 c. 1,750,000 d. 500,000 426 Andrew wants to invest in two securities, Alpha and Omega, and the relevant information is below: State of the Economy Bear Probability 0.25 Return on Alpha (%) Return on Omega (%) -15% 4% Moderate 0.5 5% Bull 0.25 20% 4% 4% Calculate expected returns and standard deviations of two securities. Andrew shorts $1,000 of Omega and invests all proceeds from this short sale as well as $3,000 of her own money into Alpha. What is the expected return and the standard deviation of her portfolio? Problem 16-12 (IAA) During 2019, Reminiscent Company bought shares of another entity to be held for trading. June 20,000 shares @P100 2,000,000 3,600,000 December 1 30,000 shares @P120 Transactions for 2020 10 January January 20 December 10 Received cash dividend at P10 per share. Received 20% share dividend. Sold 30,000 shares at P125 per share. 1. What is the gain on sale of investment using the FIFO approach? a. 1,150,000 b. 950,000 c. 150,000 d. 550,000 2. What is the gain on sale of investment using the average approach? a. 950,000 b. 750,000 c. 800,000 d. 900,000 3. What total amount should be reported as income from the investment using the FIFO approach? a. 1,650,000 b. 1,450,000 c. 1,750,000 d. 500,000 426 Andrew wants to invest in two securities, Alpha and Omega, and the relevant information is below: State of the Economy Bear Probability 0.25 Return on Alpha (%) Return on Omega (%) -15% 4% Moderate 0.5 5% Bull 0.25 20% 4% 4% Calculate expected returns and standard deviations of two securities. Andrew shorts $1,000 of Omega and invests all proceeds from this short sale as well as $3,000 of her own money into Alpha. What is the expected return and the standard deviation of her portfolio?