Achieve reasonably well diversified portfolio

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Reference no: EM131978303

1. You have $31000 to invest. You could purchase shares in one mutual fund or try to diversify on your own. From your investment class you learn that you need to hold at least 25 different securities in an equal weight portfolio to achieve a reasonably well diversified portfolio. If you pay an average commission of 1% of the dollar value of the stock you buy you will have to pay ____ in commissions per stock for a total commission of _____.

A) $12 ; $$310

B) $25; $1860

C) $50; $1888

D) $38; $1414

2. An investor holds a stock for one year. She then receives a dividend of $10 and sells the stock for $120. If her return was 16%, at what price did she buy the stock?

A. $112.07

B. $103.45

C. $139.20

D. $64.80

Reference no: EM131978303

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