You Own a Portfolio with the Following Expected Returns Given

question 78

Multiple Choice

You own a portfolio with the following expected returns given the various states of the economy. What is the overall portfolio expected return? $$\begin{array} { l c c } \text { State of } & \text { Probability of } & \text { Rate of Return } \\\text { Economy } & \text { State of Economy } & \text { if State Occurs } \\\text { Boorn } & .25 & .185 \\\text { Nomal } & .60 & .143 \\\text { Bust } & .15 &. 032\end{array}$$

• A) 14.49 percent
• B) 14.64 percent
• C) 13.87 percent
• D) 13.69 percent
• E) 14.23 percent

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Definitions:

Confidence

A feeling of self-assurance arising from one's appreciation of their own abilities or qualities.

Competence

The ability of an individual or organization to effectively perform a job or task due to their knowledge, skills, and experience.

Positive Reinforcement

A strategy in behavior management that involves giving a reward or positive outcome after a desired behavior is performed, encouraging that behavior to be repeated.

Desirable Consequence

A positive outcome or result that is sought after or desired in a specific context.