Consider a Portfolio with Three Stocks,each with the Same Value

question 1

Multiple Choice

Consider a portfolio with three stocks,each with the same value.The three stocks have expected returns of 15%,25%,and 50%.The expected return of this portfolio is

• A) 25%.
• B) 30%.
• C) 50%.
• D) 90%.

---

Definitions:

Oligopolists

Firms operating in an oligopoly, a market structure characterized by a few dominant players, which can influence prices and market practices.

Marginal Cost

The additional financial burden incurred when one more unit of a good or service is produced.

Positive-Sum Game

In game theory, a game in which the gains (+) and losses (−) add up to more than zero; one party’s gains exceed the other party’s losses. A strategic interaction (game) between two or more parties (players) in which the winners’ gains exceed the losers’ losses so that the gains and losses sum to something positive.

Positive Payoffs

Benefits or gains that are realized from an investment or action, often assessed in terms of profitability or value added.