Question: Asset Return Liabilities & Equity Return Asset A $10,000 30% Liability $1,000 16% Asset B 2,000 12% Liability D (2,500) ? Equity B 13,500 26%

Asset Return

Liabilities & Equity Return

Asset A $10,000 30%

Liability $1,000 16%

Asset B 2,000 12%

Liability D (2,500) ?

Equity B 13,500 26%

Calculate the return on Liability D as the weighted average of the returns on the other financial instruments? 5 marks. What is the weight attached to Asset A? 2 marks. Is Liability D really a liability? Explain. 3 marks.

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