The expression 1.08s + 1.02b1.08s+1.02b predicts the end-of-year value of a financial portfolio where ss is the value of stocks and bb is the value of bonds in the portfolio at the beginning of the year. What is the predicted end-of-year value of a portfolio that begins the year with \$200$200 in stocks and \$100$100 in bonds?

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wagonbelleville wagonbelleville · Answer 1 · 2019-02-22T06:59:03+01:00

Answer:

The predicted end-of-year value is $318.

Step-by-step explanation:

We are given the expression for the end-of-year value of the financial portfolio as,

[tex]y=1.08s+1.02b[/tex], where s = value of the stocks and b = value of the bonds.

it is required to find the end-of-year value of a portfolio when,

value of the stocks, s = $200

value of the bonds, b = $100

So, substituting the values in the given expression, we get,

[tex]y=1.08s+1.02b[/tex] → [tex]y=1.08\times 200+1.02\times 100[/tex] → [tex]y=216+102[/tex] → y= 318

Thus, the predicted end-of-year value is $318.