Let's break down the detailed solution step by step.
### Portfolio 1 Calculation
1. Tech Company Stock:
- Amount: [tex]$2,800
- Rate of Return (ROR): 4.99%
- Earnings: \( 2,800 \times \frac{4.99}{100} \)
2. Government Bond:
- Amount: $[/tex]3,200
- ROR: 6.87%
- Earnings: [tex]\( 3,200 \times \frac{6.87}{100} \)[/tex]
3. Junk Bond:
- Amount: [tex]$950
- ROR: -3.12%
- Earnings: \( 950 \times \frac{-3.12}{100} \)
4. Common Stock:
- Amount: $[/tex]1,500
- ROR: 9.59%
- Earnings: [tex]\( 1,500 \times \frac{9.59}{100} \)[/tex]
Summing these values gives us the total earnings for Portfolio 1.
### Portfolio 2 Calculation
1. Tech Company Stock:
- Amount: [tex]$1,275
- ROR: 4.99%
- Earnings: \( 1,275 \times \frac{4.99}{100} \)
2. Government Bond:
- Amount: $[/tex]2,200
- ROR: 6.87%
- Earnings: [tex]\( 2,200 \times \frac{6.87}{100} \)[/tex]
3. Junk Bond:
- Amount: [tex]$865
- ROR: -3.12%
- Earnings: \( 865 \times \frac{-3.12}{100} \)
4. Common Stock:
- Amount: $[/tex]1,700
- ROR: 9.59%
- Earnings: [tex]\( 1,700 \times \frac{9.59}{100} \)[/tex]
Summing these values gives us the total earnings for Portfolio 2.
### Total Earnings
After calculating we summarize:
- Total Earnings for Portfolio 1: [tex]$473.77
- Total Earnings for Portfolio 2: $[/tex]350.80
### Difference in Earnings
The difference in earnings between the two portfolios is calculated as:
[tex]\[ 473.77 - 350.80 = 122.97 \][/tex]
Therefore, Portfolio 1 earns [tex]$122.97 more than Portfolio 2. Hence, the correct answer is:
Portfolio 1 earns $[/tex]122.97 more.
