What Is the Expected Return on a Portfolio Comprised of $9,750

question 28

Multiple Choice

What is the expected return on a portfolio comprised of $9,750 of Stock X and $4,520 of Stock Y if the economy enjoys a boom period? $$\begin{array} { l c c } { \text { State of } } & \text { Probability of } & \text { Rate of Return } \\\text { Econony } & \text { State of Economy } & \text { if State Occurs } \\ & &\begin{array}{ll}\text { Stock X } & \text { Stock Y }\end{array}\\\text { Boom } & .25& \begin{array}{ll}.108 & \quad \quad .156\end{array} \\\text { Normal } & .65 & \begin{array}{ll}.087 & \quad \quad.097\end{array} \\\text { Recession } & .10&\begin{array}{ll} .024 & \quad \quad -.069\end{array}\end{array}$$

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Definitions:

Classical Conditioning

A learning process that involves associating an involuntary response and a stimulus.

Insight Learning

Insight learning is the process of learning how to solve a problem or do something new by applying what is already known, involving an 'aha' moment of understanding.

Generalization

The process of applying the principles learned from specific instances to broader and different situations.

Discrimination

In psychology, the ability to distinguish between different stimuli and respond appropriately according to their differences.