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:

Extinction

In behavioral psychology, the gradual decrease and eventual disappearance of a conditioned response after the reinforcement is no longer provided.

Punishment

The imposition of a penalty or negative consequence following an undesirable behavior, aimed at reducing that behavior.

Behaviour Occurring

Actions or reactions of an individual or group in response to external or internal stimuli.

Increase Probability

The act of making an event or outcome more likely to occur.