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What Is the Expected Return on a Portfolio Comprised Of \mathrm

question 34

Multiple Choice

What is the expected return on a portfolio comprised of C,000\mathrm { C } , 000 in share M and
 What is the expected return on a portfolio comprised of  \mathrm { C } , 000  in share M and     in share N if the economy enjoys a boom period?  \begin{array} { | l | l | l | l | }  \hline & & \text { Returns if State Occurs } \\ \hline \text { State of Economy } & \text { Probability of State of Economy } & \text { Share M } & \text { Share N } \\ \hline \text { Boom } & 10 \% & 18 \% & 10 \% \\ \hline \text { Normal } & 75 \% & 7 \% & 8 \% \\ \hline \text { Recession } & 15 \% & - 20 \% & 6 \% \\ \hline \end{array}  A) 6.4% B) 6.8% C) 10.4% D) 13.2% E) 14.0%
in share N if the economy enjoys a boom period?
 Returns if State Occurs  State of Economy  Probability of State of Economy  Share M  Share N  Boom 10%18%10% Normal 75%7%8% Recession 15%20%6%\begin{array} { | l | l | l | l | } \hline & & \text { Returns if State Occurs } \\\hline \text { State of Economy } & \text { Probability of State of Economy } & \text { Share M } & \text { Share N } \\\hline \text { Boom } & 10 \% & 18 \% & 10 \% \\\hline \text { Normal } & 75 \% & 7 \% & 8 \% \\\hline \text { Recession } & 15 \% & - 20 \% & 6 \% \\\hline\end{array}

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Definitions:

Bases

Substances that can accept protons (H+) and have a high pH; in solution, they can easily donate an electron pair.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance composed of hydrogen and oxygen, essential for most forms of life on Earth.

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