Question

You believe that you can earn 2% more on your portfolio if you engage in full-time stock research. However, the additional trading costs and tax liability from active management will cost you about 0.5%. You have an $800,000 stock portfolio. What is the most you can afford to spend on your research

Answer 1

Answer:

$12000

Explanation:

Given

trading costs and tax liability = 0.5%

= 0.005

Excess Earnings =2%

= 0.02

stock portfolio cost = $800,000

Highest expenditure on research = (Excess Earnings - trading costs and tax liability) × stock portfolio cost

= (0.02 - 0.005) × $800,000

= $12000

Answer 2

Answer:

?

Explanation: