Question

You have a portfolio valued at $10,000. Over the next twelve months it loses 50% of its value. What return does the portfolio need to earn over the following twelve months to be restored to its original value?

Answer 1

Answer:

return = 100%

Explanation:

given data  

portfolio valued = $10,000

time = 12 months  

loses = 50%

             

solution    

we get here loss value for next 12 month is  

= $10,000 × 50%       .....................1

= $10,000 × 0.50  

= $5000

and  

return will be here as    

return =  $\frac{5000}{5000}$   × 100         .......................2

return = 1 × 100  

return = 100%