Mr Camden Has a Portfolio Consisting of Two Investments

question 146

Multiple Choice

Mr. Camden has a portfolio consisting of two investments.   The first investment represents 60% of the overall value of the portfolio and is expected to return 9%.   The second investment represents the remaining 40% and is expected to return 7%.   What is the expected return of the portfolio?

• A)​8%
• B)​7.8%
• C)​9.0%
• D)​8.2%

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Definitions:

Bureaucracy

A large, impersonal organization composed of many clearly defined positions arranged in a hierarchy. A bureaucracy has a permanent, salaried staff of qualified experts and written goals, rules, and procedures. Staff members always try to find ways of running the bureaucracy more efficiently.

Business

Economic activities that involve providing goods or services with the motive of earning profit.

Salaried Staff

Employees who receive a fixed compensation regularly (usually monthly or biannually) regardless of the number of hours worked.

Bureaucracy

A structured organizational system characterized by fixed hierarchical levels, a focus on procedural correctness, and a division of responsibilities designed to streamline operations and decision-making.