1. Net income divided by the book value of equity is the:
- return on invested capital
- marginal cost of capital
- market-to-book ratio
- return on equity
2. Portfolio Weights An investor owns $29,000 of Adobe Systems stock, $32,000 of Dow Chemical, and $42,000 of Office Depot. What are the portfolio weights of each stock?
Adobe System = 0.27, Dow Chemical = 0.33, Office Depot = 0.40
Adobe System = 0.33, Dow Chemical = 0.33, Office Depot = 0.33
Adobe System = 0.31, Dow Chemical = 0.28, Office Depot = 0.41
Adobe System = 0.28, Dow Chemical = 0.31, Office Depot = 0.41