An Investor Owns a Security That Is Expected to Return

question 53

Multiple Choice

An investor owns a security that is expected to return 12% in a booming economy and 4% in a normal economy. The overall expected return on the security is 7.80%. Given there are only two states of the economy, what is the probability that the economy will boom?

• A)35.0%
• B)37.5%
• C)40.0%
• D)45.0%
• E)47.5%

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Definitions:

Trusted Folder

A designated directory on a computer that is considered secure by software applications, where files can be saved without triggering security warnings.

Security Warning

A notification or alert indicating potential security risks, such as unauthorized access or the presence of malicious software.

Enable Content Button

A feature in software that permits the activation of content that may be disabled by default for security.

If Block

Conditional programming structure that executes a set of statements based on whether a specified condition is true.