ABC Investment Corporation Is Considering a Portfolio with 30% Weighting

question 57

Multiple Choice

ABC Investment Corporation is considering a portfolio with 30% weighting in a cyclical stock and 70% weighting in a countercyclical stock. It is expected that there will be three economic states;
Good, Average and Bad, each with equal probabilities of occurrence. The cyclical stock is expected
To have returns of 12%, 5% and 1% in Good, Average and Bad economies respectively. The
Countercyclical stock is expected to have returns of -8%, 2% and 14% in Good, Average and Bad
Economies respectively. Given this information, calculate the portfolio variance.

• A) .0015
• B) .0025
• C) .0035
• D) .0045
• E) .0055

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Definitions:

Moral Grand Narratives

Broad, overarching stories or theories that attempt to explain complex moral or ethical principles and how they guide human behavior.

Individualism

A social and political philosophy that emphasizes the moral worth of the individual, advocating for freedom and self-expression.

Modernity

A historical period characterized by the move from feudalism to capitalism, industrialization, secularization, and the rise of the nation-state.

Moral Idolization

The adulation or excessive admiration of a person or concept as embodying ideal moral standards or virtues.