What Is the Expected Return on a Portfolio That Is

question 37

Multiple Choice

What is the expected return on a portfolio that is invested 22 percent in Stock A, 36 percent in Stock B, and the remainder in Stock C? $$\begin{array} { l ccccc } { \text { State of } } & { \text { Probability of } } &&\text { Rate of Return }\\\text { Economy } & \text { State of Economy } & &{ \text { if State Occurs } } \\& & \text { Stock A } & \text { Stock B } & \text { Stock C } \\\text { Boom } & .05 & .18 & .11 & .13 \\\text { Normal } & .92 & .09& .08 & .06 \\\text { Bust } &.03& - .07& - .05 & -.14\end{array}$$

---

Definitions:

Budgeted Expenditure

Planned spending for a specific period as outlined in a budget, which serves as a financial plan and guideline for managing expenses.

Actual Expenditure

The real amount of money spent on goods, services, and other expenses during a specific period.

Variable Overhead Variances

The difference between the actual variable overhead incurred and the standard cost assigned to production, indicating efficiency or inefficiency.

Efficiency Variance

The difference between the actual input used in production and the standard input expected, calculated to assess performance.