Question

The expressions 1.08s+1.02b predicts the end of the year value of a financial portfolio where S is the value of stocks and B is the value of bonds in a portfolio at the beginning of the year. What is the predicted end-of-the-year value of a portfolio that beginsthe year with $200 in stock and $100 in bonds

Answer 1

We have

Stock = $200

Bonds = $100

Substitute these values into 1.08s+1.02b, where 's' is stock and 'b' is bond

1.08(200)+1.02(100)=318

Predicted end of year value is $318

Explanation: