Compute the Expected Return Given These Three Economic States, Their

question 38

Multiple Choice

Compute the expected return given these three economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.2 & 23 \% \\\text {slow growth }&0.6 & 14\% \\\text { recession }&0.2 & - 30\%\\\end{array}\end{array}$$

• A) 3.5 percent
• B) 7.0 percent
• C) 7.5 percent
• D) 12.5 percent

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Definitions:

Pointed Arches

An architectural element characteristic of Gothic style, featuring arches with pointed apexes, which allowed for higher structures and larger windows.

Naumburg Master

A term used to describe an unidentified German sculptor or group of sculptors of the 13th century, famous for their work in the Naumburg Cathedral.

Master Honoré

A noted Parisian miniature painter from the late 13th and early 14th centuries, known for his work in illuminated manuscripts.

Sexpartite Rib Vaults

A complex vaulting system in Gothic architecture, dividing the ceiling into six vaulted compartments with the use of ribs for structural and decorative purposes.