A Portfolio Consists of $18,740 of Stock K and $31,910

question 63

Multiple Choice

A portfolio consists of $18,740 of Stock K and $31,910 of Stock L.Stock K is expected to return 17 percent in a booming economy,lose 6 percent in a recession,and gain 9 percent in a normal economy.Stock L is expected to return 4 percent in a booming economy,13 percent in a recession,and 10 percent in a normal economy.The probability of the economy booming is 16 percent.What is the expected rate of return on the portfolio if the economy enters a recession?

• A)-4.59%
• B)-2.62%
• C)5)97%
• D)3)71%
• E)0)74%

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Definitions:

Audience Effect

The impact on an individual's performance when they are aware they are being observed by others.

Co-action Effect

A phenomenon where the presence of others engaged in the same task can improve individual performance.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically improving on well-practiced tasks.

Achievement Motivation

Factors that move people to seek success in academic settings.