You Have a Portfolio Which Is Comprised of 70% of Stock

question 15

Multiple Choice

You have a portfolio which is comprised of 70% of Stock A and 30% of Stock B. What is the expected return on this portfolio?
$\begin{array}{lrrr}\text { State of the Economy } & \text { Probability } & \text { E(R) }_{A}& \text { E(R) }_{B}\\\text { Weight } & &70 \% & 30 \% \\\\\text { Boom } & .2 & 20 \% & 14\% \\\text { Normal } & .6 & 12 \% & 8 \% \\\text { Recession } & .2 & -8 \% & 5\%\end{array}$

• A)9.30%
• B)9.58%
• C)10.03%
• D)11.79%
• E)12.40%

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Definitions:

Axons

Long, threadlike parts of a nerve cell along which impulses are conducted from the cell body to other cells.

Dendrites

The branched projections from the neuron's cell body that receive neural impulses from other neurons and transmit them towards the cell body.

Sulci

Grooves or furrows on the surface of the brain.

Brain Matter

Tissue making up the brain, categorized into gray matter (neuron cell bodies and dendrites) and white matter (myelinated axon tracts).